Free Gifts one-ups Facebook using their own platform

People have speculated that Facebook may have shot themselves in the foot by allowing third-party developers to create virtually any kind of application to run inside their site. While most agree that the platform is a good move in the long-term, we now have some short-term evidence to the contrary, in an app that literally takes money from Facebook.

Facebook has been in the virtual gift-giving business for a while. A “Gifts” app comes standard with every Facebook profile, and allows users to purchase little icons to send to friends, whether public or private. These picture gifts cost $1. Facebook donates a certain portion of each gift to charity, but undoubtedly makes a profit on pixels nonetheless.

But, with the advent of the app platform, Zachary Allia saw an opportunity to recreate this same functionality without the (he thought) high price tag, and so he developed Free Gifts, an app which mirrors Facebook’s Gifts in almost every respect – except it’s free. In an informal interview with InsideFacebook.com, we asked him why he thought Free Gifts needed to be made, and the answer was simple: “I just didn’t like the idea of paying for those images. They do have some good looking ones, but I wasn’t ready to fork over money for them.”

Apparently, the much-touted icon design of Susan Kare is not worth it for over 717,000 other Facebook users either! Free Gifts has been radically successful, despite not yet having even made it into the official Facebook directory. Allia’s nonchalant about that latter fact, and thinks that it will be included sometime this weekend, and will moreover bump his user base to over a million.

With 717,000 users, some will be disgruntled – and indeed some have complained about the quality of the images as compared to the standard Facebook ones, or the fact that in not buying Facebook-sanctioned gifts, users are not donating any money to charity. But, in the end, it’s hard to complain about someone offering a free service.

And that’s what might be worrying Facebook execs about this source of revenue which comes directly from users. As far as we can tell, however, Allia’s application is not controverting Facebook’s TOS, and he himself is sanguine about competition in general: “I didn’t think [Facebook] would mind, because it…doesn’t steal users from them.” I suppose that’s really the question – would a user who otherwise would have paid a $1 for a gift use Free Gifts instead? Or is Free Gifts being used mainly by people who would never have paid for a gift in the first place?

In the longer term, it will be interesting to see if the Facebook platform effectively blocks Facebook from rolling out other apps like Gifts that generate income, since, for the time being, it seems that almost anything Facebook can do, an app developer can do for free.

[tags]facebook,app,apps,applications,gifts,free-gifts[/tags]

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Leave a Reply

11 Responses to “Free Gifts one-ups Facebook using their own platform”

  1. Four Months Later: Facebook Gifts retrospective at the Sam Jackson College Experience says:

    [...] One More Note: Inside Facebook has some nice info on the Free Gifts app which inspired this post. [...]

  2. TheSMKC says:

    “And that’s what might be worrying Facebook execs about this source of revenue which comes directly from users.”

    What about the ads, flyers, polls, sponsored groups, the ads in the news feed, etc?

  3. Adam Webb says:

    I have not added this application, as I believe the gifts should be paid for, not everyone will pay for a gift,but in doing so it’s more formal, it proves you obviously think highley of someone than a useless free gift anyone could give.

  4. Nate Enyedi says:

    Facebook no longer donates a portion of paid gifts to charity. This was just in February.

  5. Don McLagan says:

    It’s now October 2007, and I met Zach at ContextNext where Zach reports his user base has now reached 7 million people access Free Gifts on Facebook via his app.

  6. Facebook Information Links and Stats | FAQHit.com says:

    [...] “facebook gifts“, [...]

  7. Ben Dunn says:

    I think the free gifts application is fully justified. If people want to pay for gifts, then what is to stop them? On the other hand students like to send each other little ‘presents’ to show signs of affection–I don’t see why we should have to pay for it! One might say that other applications should be payed for: should we pay for videos? For wall-posts? For photos?! Of course not. The whole point being that they are VIRTUAL gifts, such an application is really not dissimilar to any other facebook function.

  8. Inside Facebook » Facebook Selling Virtual Gifts at $30-40 Million/Year Rate says:

    [...] the existence of free alternatives, Facebook is showing that there is significant demand and payment infrastructure in place for its [...]

  9. adeleke wali says:

    i to you all in facebook organisation.iwant you people to send me a gift

  10. Maren says:

    virtuell bullshit….get a life in the real world haha :-))

  11. Angela says:

    Giftorama is an alternative. It’s a mix of free and paid-for gifts on Facebook, but most are free.

interested in advertising with inside facebook?

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