FACEBOOK GIFT CARDS - THE NEXT BIG THING IN GIFT GIVING?! AFRAID NOT - AT LEAST NOT YET

A few days ago, Facebook announced the launch of their own gift card program powered by the folks that brought you the ever-popular Discover Card (is that even still around?!).  The basic gist is that it's a  re-loadable and re-usable "mega card" that  you'll be able to use at a variety of retailers, and which will eventually replace all those gift cards that you buy, get or likely have lost somewhere in your house. Oh yeah, and you'll be able to manage any and all gift cards you get - provided of course that the retailer is part of Facebook's program (more on that later).

So looking at this from a consumer's point of view, it sounds pretty good in theory - a single card that I can use to manage my balances across a number of retailers (they announced 4 pretty big ones as part or their launch). But it quickly starts to make less sense when you consider the realities of how customers - both on the giving and receiving end - interact with gift cards (having witnessed this behavior first hand during my time at GameStop) as well as the new friction that Facebook's card brings to the table.

First the customer realities. Gift cards are, for the most part, a present of last resort when you either have run out of time, ideas or energy to buy something specific or more creative. It's one step above stuffing cash in a envelope on the creative gifting scale - at least with gift cards you're telling the person "hey, I know enough about you to know what you like/where you like to shop but not enough to get you something specific that you'll likely end up returning or re-gifting so here's some free credit to use as you see fit." And more often than not these gift cards are given in denominations that are conducive to a single purchase as opposed to bankrolling your buying habits at a retailer for a month or two. So the reality is that most gift givers today prefer giving branded cards from a specific retailer.

For those folks that get these lovely gift cards, it seems like it would actually be more confusing to use Facebook's card when you go into a specific store as opposed to the store's card - because after all, how many of us will really be able to remember which cards we connected to our Facebook account?!  Plus, most folks use the card well before they'll take the time and effort to go online and connect the card.

Another point of friction is that, unlike the recently shelved Facebook Credits universal currency program, Facebook's gift card doesn't allow you the ability to load cash on it and spend it as you see fit across the spectrum of participating retailers.  This is one instance where taking a universal approach would actually work.

And oh yeah, let's not forget the retailers themselves - perhaps the most important part of the equation!  It goes without saying that Facebook's gift card program will only be as strong as its stable or  retail partners.  Without having almost every tier 1 retail chain signed up to participate, I don't see the gift card program being all that compelling to consumers.  In addition to risking brand dilution by having their branded cards replaced with a single "mega card," retailers are loathe to divvy up the revenue pie any more than they have to.  While it's not clear from what's been talked about publicly regarding Facebook's program, my assumption is that they are looking to take a piece of the action for every dollar spent through their card/program.  As it stands now, retailers have to share a portion of every dollar put on their own cards with: 1) the third party company that processes and manages their gift card program; and 2) in those cases where their cards are sold at locations other than their own, that 3rd party gets a cut as well.  Imagine now having to cut Facebook into the mix -- I don't see a ton of retailers standing in line so sign up for this program.

This isn't to say that Facebook's gift card program won't have some measure of success eventually - I just don't see it being a game changer anytime soon.

BANKING THE UNBANKABLE -- COINSTAR EMPOWERS YOUNG GAMERS

Truth be told I've known about this initiative by Coinstar for a little while now, mainly through following one of the companies (Rixty) listed in the release, so I was thrilled to see this news hit the wires yesterday because it's a great example of a traditional brick-and-mortar based business finding creative ways to get in the new media world game.

The basic premise is that Coinstar is allowing consumers (read: pre-teen and teen gamers with no access to credit cards as a way of paying for their digital entertainment addiction - I mean, hobby) to turn in their coins in exchange for pre-paid spending cards for onling games, virtual worlds and social networks. Some of the other digital entertainment properties attached to this initiative include Aeria, Stardoll, WeeWorld, Adventure Quest Worlds and, perhaps most importantly, Facebook and MySpace. I'm sure that more companies in these spaces will soon follow suit and join the Coinstar consortium -- the question is, can mainstream media companies be far behind? Hulu pre-paid card anyone?!

Just when you thought that Sparkletts water bottle full of coins was never gonna see the light of day!!

TAKING A PEEK AT THE PEEK

I'm sure some of you have already seen this new mobile communication device called The Peek - but for those of you who haven't, let me be the first to give you my two cents about it . . . don't bother.

What is it you ask? Quite simply, it's a portable device that is 100% dedicated to emailing and texting. According to their CEO Amol Sarva, there are a ton of people out there who want a simple to use (it only takes a few minutes to set up) and affordable ($49.95 for the device and $19.95 a month with no contracts) device that allows them to stay in touch on the go - but without having the ability to actually call and talk to people.

Don't get me wrong, it's a pretty slick looking device - and I'm sure that there will be folks out there for whom this is a perfect fit. But I personally think that there are a number of factors working against it, including:

1. Device Fatigue -- as we continue to be bombarded with more and more choices when it comes to portable devices (cell phones, smart phones, digital cameras, laptops, netbooks, etc.), at the end of the day most people want to simplify their lives and pare down on the number of devices (and power cords) they use and have with them at all times. And more likely than not, these same people will be willing to pay a premium for the convenience of less devices.

2. Email Is Becoming Less and Less Relevant -- we can't deny that we're in an age of immediacy that is being driven, in large part, by the continuing proliferation and use of telephony and texting functions associated with pretty much all cell phones these days - not to mention the meteoric rise of social communication tools like Twitter and Facebook. As a result, email is being used more and more as a third or fourth option when it comes to communication. So when faced with the choice of having a device that allows you to talk and text (in addition to a handful of other bells and whistles), or one that lets you just text and email, chances are you'll choose the former.

3. Price -- while 20 bucks a month is definitely a good deal, the reality is that most people are still willing to pay a bit more for a portable device that fits the criteria mentioned in #2, in addition to having other utilitarian features such as a camera and Internet access (through which, by the way, you can also access and use email). And it's safe to assume that pricing on mobile phone services from the carriers will only continue to go down.

Long story short -- extremely slick looking device with a price point and service that may appeal to an extremely small group of consumers, but at the end of the day, less is more when it comes to devices.

TECH FOR THE AVERAGE PERSON (T.A.P.) -- A NEW, SEMI-REGULAR SERIES

I don't know about you, but for years now I've been one of those people that family and friends call up with questions about pretty much anything and everything having to do with technology -- I guess the thinking is that since I've been in businesses involving computers, the Internet and cell phones for a while now, I must know a little something about any or all of those things. And they're right - with an emphasis on the word "little!"

So it got me thinking that it may be useful every once in a while to write about a topic that, while it may be something that is on the minds of my family and friends (and by extension, maybe your family and friends), they haven't yet gotten around to asking me about it -- for now I'll call it the T.A.P. ("Tech for the Average Person") series. And unfortunately it's gonna be a bit more advanced than things like "how do I set my answering machine?" (sorry mom and dad. . .) or "what is this Facebook/LinkedIn thing all about?" (if you don't know already, don't bother) -- but not by much!

So if there's anything on your mind that you've been wondering about, feel free to drop me a line at chris@bravenewmediaworld.com and I'll see what helpful info I can come up with for you!

THE FACEBOOK DILEMMA - TO CHARGE OR NOT TO CHARGE? IT'S ALL IN THE STOOL

Over the last several months there's been a lot of chatter about this, both in the media/blogosphere as well as (more importantly!) within the Facebook community. Doing a quick search on Facebook for "Facebook charging" bring back 287 group results (many of which have few, if any, members) generally related to this topic. Two early articles include one from Farhad Manjoo at Slate and Mike Masnick from TechDirt.

Since it seems to be a slow brain day, I thought I'd revisit a somewhat old topic today, instead of coming up with a new one on my own, and give my two cents (after all - that's about all my opinion is worth these days!). I will admit right off the bat that my opinion is not 100% Facebook-user centric, but rather also looks at this also from the perspective of what makes sense from a business perspective. So you won't be seeing me join any of these groups anytime soon!

I've been fortunate enough to have worked at two companies -- Playboy and American Greetings -- that have demonstrated a certain measure of success with employing a multi-revenue stream model in their online businesses -- what I would call the "three-legged revenue stool" -- Advertising (banners, buttons, video ads, etc.); Access Fees (charging users a toll of some kind to access premium content and/or services) and E-Commerce (selling tangible products).

Based in part on my time spent at these companies, and also based in part on my feeling that diversification in one's portfolio -- whether it's your online business or your 401(k) -- is a good thing, I happen to be a fan of the multi-leg stool. It goes without saying that the more legs (within reason!) a stool has, the sturdier that stool will be. Too many online businesses of late have decided to put all their eggs in the single-leg stool model (advertising) and as a result, have been unable to develop a defensible/scalable business model for themselves.

By having multiple revenue streams, a business can manage these streams like levers, and throttle them up or down depending on factors like consumer behavior & feedback, market conditions, competitive landscape and effective ROI. These streams in turn act like a natural hedge, giving the company that much more to fall back on in case one of the legs of the stool starts to get a bit wobbly.

By all accounts, Facebook, for all its immense global popularity and usage is still not a profitable business and they're yet again looking to raise a ton of additional money (somewhere in the neighborhood of $1oo million) to help keep the lights on. Clearly the current models in place for generating revenue are not paying the bills, so as with any smart business, they should be (and likely are) looking at ways to generate enough cash to get to profitability and generate a respectible return for their investors -- after all, isn't that the basic goal of most companies?

It's safe to say that with around 200 million users worldwide and the distinction of being one of, if not the largest photo storage/sharing site on the Web, Facebook has evolved beyond simply a social network and into a social utility -- one that provides value to most, if not all, of its users. So why a valuable utility not charge its customers for some portion of its service? The questions then become -- what to charge for and how much? In terms of what to charge for, it could be anywhere from a flat fee for initial access to an advertising-free Facebook environment to tiered charges based on usage (consumer vs. commercial accounts, # of photos uploaded, # of friends in your friends list AKA address book, etc.).

For example, let's assume that Facebook charged a flat fee of $1 per month for consumer access to the service, and assuming that the majority of users (let's say 75% for the sake of argument) agreed to pay the toll, that would be a nice chunk of change for Facebook - $150 million dollars PER MONTH give or take. Of course nobody can predict what percentage of users would actually stop using Facebook and what effect an access fee ecosystem would have on new user sign ups, but if you're like me you wouldn't think twice about paying 12 bucks a year to service one of the most valuable social utilities ever invented. After all, we happily pay for other valuable services -- my roster includes the gym, Netflix, Flickr Pro -- that cost as much if not way more -- so why not Facebook?

Would love to hear your thoughts on this.