Facebook celebrated its fifth birthday last week with 150 million of its closest friends. Today, I give my gift to Facebook: four ways to make some big money this year.
1. Be a Better Google
Google owns close to 100-percent market share in the search engine wars because it’s the best at helping us find what we’re looking for. While it’s the best, it still isn’t very good.
If you search for someone famous or something factual, a Wikipedia page is likely the top result. That’s why more people go straight to Wikipedia or use tools such as Powerset.
After performing a Google search for a product or service, you’re bombarded with advertisements all touting the same thing in 35 characters or less — cheapest fares! best value! lowest price guaranteed! buy now! — with the top advertising placements going to those that generate the most revenue over the long term for Google rather than the most relevant result for you.
Everyone receiving the same search results is analogous to going to Nordstrom to buy a dress and the sales clerk offering you selections without determining what size you are.
Let’s say that we’re in the market to purchase a baby seat for our newborn. Do we care more about what our friends recommend, or what Google recommends? If you have good friends, I’m sure you respect your friends’ opinions much more.
This means there’s plenty of opportunity for Facebook. They already have the technology (Facebook Beacon) to track user purchases on Web sites outside of Facebook (Beacon can track books I purchase on Amazon.com, for example).
As a user, it’s much more helpful for me to see a list of results of what baby seats my friends purchased, how much they paid, and what their reviews are, combined with supplier ads (think Google sponsored ad listings) than the Google results today — results that don’t have anything about what my friends think.
Google recognizes this deficiency and has released Google Suggest, which enables users with Google accounts (mainly Gmail) to rate and comment on the search results. If Facebook can cobble the good technology they already have (Connect, Beacon, etc.), then they could literally steal billions of dollars in revenue from Google.
2. Let Facebookers Take Ownership of Brands
Long before the advent of social media, people have defined themselves by the brands they associate with, whether it’s a designer clothing label or car make and model. Facebook enables more transparency into this as the social graph can easily see when their friends join a Prada group or Land Rover fan page.
Generation X through Z take ownership of brands like never before. Facebook should recognize this and make it part of users’ profile data: What 5 brands do you associate with? This helps fellow Facebookers have a better understanding of that person while opening the revenue door for Facebook. A person who lists Apple, Zappos, Audi, Lacoste, and Guinness is much different than someone who lists Honda, Applebee’s, Dunkin’ Donuts, Wrangler, and AOL.
For the revenue piece, Facebook could simply include, “Would you like to be alerted of specials for any of these brands?” It’s much less intrusive to receive a notification within Facebook than e-mail spam to your inbox. Besides, Gen Y and Gen Z don’t use e-mail as a primary form of communication.
3. Enhanced Facebook Gifts
One of the savviest business decisions Facebook made was charging $1 for little icons that range from cupcakes to hearts. The user pays $1 for these “gifts” and sends them to their friend. This is 100 percent profit for Facebook.
They’ve even allowed business, including Skittles and Coors Light, to sponsor icons. Along these business lines, Facebook could take this a little further by supplying something of material value to the user and to the product sponsor. This could be as simple as sending a downloadable iTunes song or Verizon ringtone that the gifter pays for.
Imagine how many of these would occur last minute on Valentine’s Day alone (trust me, men don’t plan): “I just wanted to tell you this song reminds me of you.” Or you could send your buddy a quick icon of a six-pack of Corona that has a redeemable coupon code. The user benefits because they can give a gift of substance, and Facebook benefits by increasing the amount of gifts given while they take a percentage of the revenue.
Lastly, the supplier/advertiser benefits by selling more products and increasing their brand awareness. The advertiser would pay Facebook a percentage every time a “gift” is purchased. Since this would result in revenue for the advertiser, it’s more of a CPA buy, which mitigates risk from them while putting money into Facebook’s pockets.
4. Small Business Functionality
Facebook should add e-commerce functionality to their fan pages by creating a new offering: merchant pages. They can set up credit card transactions and other fulfillment items/hooks.
Even though we’re almost a decade removed from the ’90s, small businesses still struggle to figure out how to inexpensively sell and fulfill their products and services online. Facebook merchant pages could complement existing small business Web sites or be their exclusive presence. Facebook would generate revenue by taking a micro-payment portion of the transactions.
Merchants would welcome an easy and cost-effective offering like this from Facebook. It would also network well with item number one listed above. Isn’t that what being social is all about?