Inside Facebook

From what I hear, the greeting card business is a great one: hire freelance artists in small towns across America on contract, get as much distribution as you can, and sell them for $3-$6 a pop. The folks at Blue Mountain Arts figured out that this was an interesting space early on in history of the web, creating a free online greeting card business and selling it to Excite in 1999 for a cool $1 billion (granted, those ended up being play dollars, but it was a big deal at the time).

Now that the social web is upon us, who is winning the greeting card business? If my personal experience is any indication, it looks like a large share is going to Facebook and the social networking platforms and applications. Yesterday was my birthday, and here are the birthday greetings messages I received, by type, as anecdotal data:

Why would Facebook wall posts be such a popular way (52% of all messages, if you include the public Facebook Gift) to wish friend happy birthday?

As Jeremy Liew suggests, the public nature of the Facebook wall post provides additional value to both the sender and receiver of the message than if the message had been sent privately (email, snail mail, phone call, text message, Facebook message, online greeting card). Because the message is public, the sender is seen as someone “who sends happy birthday messages,” and the receiver is seen as someone “who gets happy birthday messages.”  Short of tacking things to your drywall at home or cubicle at work, it’s pretty hard for those same dynamics to emerge with a Hallmark card.

So who’s playing in this market in the Facebook Platform? Even though I didn’t receive any personal messages from gifting or birthday-related Facebook applications, there are 3 large players on the Facebook Platform in the birthday greetings market alone:

• Birthday Calendar by BigDates Solutions (3.35 million monthly active users)
• Birthday Greeting Cards by My Birthday Alarm (2.25 million monthly active users)
• Birthday Cards by RockYou (2.03 million monthly active users)
• Free Gifts by SGN (1.25 million monthly active users)

Given that Facebook’s doing $35 million a year in virtual gifts, these apps have the potential to do quite well for themselves. Who’s going to take one of these independent players out?