Don't blame Facebook for not trying hard enough. Its just-launched initiative, Facebook Collections, is the latest in a string of announcements designed to build a revenue-positive future for the social media pioneer.
Facebook Collections is currently being piloted by seven U.S. retailers, including Pottery Barn, Neiman Marcus, Victoria's Secret, Michael Kors, Smith Optics, Wayfair, and Fab.com. The new feature adds "Want" and "Collect" buttons in addition to the existing "Like", and allows users to let friends know on their timelines what they'd like to purchase. Links to the retailers allow users to complete purchases, as well, though Facebook currently isn't taking a percentage of sales.
"People will be able to engage with these collections and share things they are interested in with their friends," the company said in a statement.
One attempt after another
The addition of a Want button builds on Facebook's recently introduced Gifts feature, which allows users to purchase and ship real goods. The two initiatives represent key steps in Facebook's conversion from a purely social hub to one based on monetizing its billion-strong user base.
Moving quickly on that front is essential in light of Facebook's dismal share value performance since going public in May. The stock slipped from $38 at launch to less than half its value last month. It's since recovered to around $20, but investors -- doubtful the company's existing business model will drive much near-term revenue growth -- are taking a wait-and-see attitude as Facebook races to bring new programs to market.
Collections, in particular, seems to mimic Pinterest, a fast-growing social media service that lets users tag images online to create shareable collections. Pinterest appeals to a higher-income, well-educated demographic particularly coveted by advertisers, and is a potential threat to Facebook's goal of exploiting its users to drive revenue and appease investors.
Risking the brand
With Facebook's aggressive push to rewrite its business model, Collections highlights a tense balancing act as the company attempts to satisfy investor demands for consistent revenue growth along with end user wishes to not feel like they're being sold something every time they log in. Converting user traffic into revenue is a tall order for a service largely known for routine interpersonal exchanges like status updates and photo sharing. It remains to be seen whether Facebook's users are ready for a radical, commerce-heavy shift in how the service works.
The risk that Facebook and other social media platforms face lies in implementing a commercial influence — like advertising — in a way that doesn't compromise the ideals of the service that attracted users in the first place. If Facebook turns its relatively peaceful walled garden into a high-energy sales-driven environment, frustrated users might start looking for new pastures where they can be social.
The danger extends to Facebook's mobile push, as well, as integrating advertising into the smaller screens and on-the-go workflows of mobile users is even more challenging than the traditional desktops that have long been Facebook's ideal domain. The company has struggled to replicate the user experience within its smartphone and tablet apps, as well as on mobile-enabled versions of its core website. Monetization adds another challenge to an equation Facebook has yet to solve.
Facebook's advantage here could lie in the data it collects. Its already-deep well of user-generated information will get even deeper as users familiarize themselves with the new Want and Collect buttons. As much as Collections positions Facebook for an e-commerce-enabled future, the revenue windfall investors hope for could come from the back-end as Facebook learns how to market that data to other businesses.
Carmi Levy is a London, Ont.-based independent technology analyst and journalist. The opinions expressed are his own. firstname.lastname@example.org