Facebook getting out of the gift card business

Facebook is backing out of the gift card business. Facebook’s Gifts service is set to be discontinued on August 12.

The service that launched back in September 2012 was scaled back from allowing users to purchase and send actual presents to friends on their birthdays or other occasions, to only allowing users to send e-gift cards activated by digital codes. Apparently even that proved to be too much for Facebook to keep up with.

Of course it could be a move away from pushing tangible items to the more ephemeral, yet more lucrative business of selling ads and putting “Buy” buttons on other people’s products.

Or maybe the gift card business just wasn’t as profitable as they would have liked. It will be interesting to see if ads from Starbucks or Target appearing on Facebook start featuring “Buy” buttons for gift cards.

Facebook’s foray into the mobile market has paid great dividends to the company and their mobile ad business has been booming. As they add more mobile advertising features such as advanced analytics and targeted, automated purchasing options this side of their business should expand even further.

I’m not sure how many Facebook users are going to miss the Gifts service, but maybe there are a score of grandmothers out there who found it an easy way to fulfil their obligations to grandkids on their birthdays.