Facebook Shares Jump 6% After Gifts Program Launches

A couple of days ago, Pulse2 wrote about how Facebook launched a new Gifts service.  Facebook users are able to send real and physical gifts to friends on their birthdays, engagements, and weddings.  This gives Facebook a third monetization strategy beyond advertising and virtual currency.  Shares of Facebook increased around 6.6% as a result.

Facebook made around $1 billion in net income and $3.7 billion in revenue last year.  The increase in revenue earned from gifts would lead to a small bump in profit, but the company launched this new service with perfect timing since we are getting in the gift-giving holiday season.  This service will also drive more users to store their credit card numbers on Facebook’s servers to buy the gifts.

When Facebook filed for their IPO, they had disclosed that around 15 million users bought virtual currency Credits last year. Apple iTunes has around 435 users and credit cards store.

This article was written by Amit Chowdhry. You can follow me at @amitchowdhry or on Google+ at
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