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Facebook Deals: Who gets what?

Rory Cellan-Jones | 15:50 UK time, Monday, 31 January 2011

Here's Facebook's view of your social networking future. You walk down the street brandishing your smartphone, and "checking in" via the Facebook Places app to shops, cafes and other businesses. In return you get 50% off a cup of coffee, extra dishes at the sushi bar, or even the loan of a sports car for a few months.

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"This is really, really exciting," said the eager young American woman unveiling Facebook Deals, as the product is called, at this morning's launch. Excitement is par for the course at these kind of events - along with applause from "supporters" in the audience. I struggled to share her enthusiasm - this is basically just another loyalty scheme for retailers, right?

Emily White, head of Local for Facebook went on to explain that "it allows businesses to start joining the conversation". I sat wondering whether having my local supermarket intruding into my social life was quite such a hot idea. But Emily went on: "Your life is not just about the people in it - it's also the experiences you're having and the businesses and places around you."

Many big brands apparently now have more Facebook friends on their fan pages than they have visitors to their websites - and the social network says it wants to help them get even friendlier with their customers. It has signed up the likes of Argos, Starbucks, O2 and Debenhams, which will now be offering rewards to Facebook users who check in with their phones.

So who gets what from this new service? It's obvious what is in it for the big brands - it gives them an easy way to tap into Facebook's social graph, learn more about their customers and perhaps get more traffic to their businesses.

For users, if they are prepared to share their location with these businesses - a big if - there is the prospect of a few deals. That might attract the dedicated bargain-hunters but I still find it hard to believe that most Facebook members want to be bothered with this kind of activity. Unless of course they find that all their friends are doing it, at which point it becomes a social activity, like posting photos or playing games.

The Facebook executives were asked at the press conference just how many people were using the service in the United States where it launched late last year. "Millions," was the closest we got to an answer, which left us none the wiser.

And finally, what is in it for Facebook itself? Nothing, apparently, in terms of revenue - it's a service offered free to businesses and users. The company isn't ruling out taking a cut somewhere along the line but insists that for now it's just about making Facebook more fun: "You see this with everything we do," explained Emily White, "we start by optimising the user experience."

The bigger picture is that this is an idea which has already been tried out by other companies, most notably FourSquare which turns your life into a mobile game, with rewards for turning up regularly at places like your local coffee bar. Facebook's sheer scale could mean that brands now ignore the New York-based start-up, endangering its mission to prove it is on the path to profitability. In other words, Places Deals could be just another small step in Facebook's mission to crush all opposition as it becomes the one network that rules the world.

Right through its history, Mark Zuckerberg's company has introduced innovations which have been attacked as having little appeal to users, and no obvious commercial benefits. And, as documented in episode two of The Secret History of Social Networking on Radio 4 this coming Wednesday, he has almost always proved the critics wrong - more users arrive, and opportunities to earn money from them come along eventually.

So perhaps checking in on Facebook and collecting free goodies all along your local high street will soon become as common as posting photos or playing Farmville. I just don't see that happening. Then again, I'm the one who told Mark Zuckerberg in 2008 that he was bonkers not to sell up while the going was good.

Comments

  • Comment number 1.

    In many business areas there is a very great danger of online colossus's (sp?) like Google, Amazon Ebay or Facebook encroaching on existing startups. I work in the Online Recruitment sector, and we live under the threat of Google deciding to get into this market, and wiping out Monster, Jobsite and the rest. FourSquare may not be sufficiently established to withstand Facebook's play here, such that FB needn't even consider buying it, preferring to obliterate instead.

    I see that this will happen more regularly, and could potentially stifle many new developments and businesses.

    As I blogged recently, FB's changes to it's Privacy Settings, in favour of advertisers, shows how difficult it is to stop their onward march.

    http://ayeright.com/2011/01/facebook-privacy-alert/

  • Comment number 2.

    Am I the only one who thinks the world of social networking is getting scarier by the day? On the one hand we have people complaining about the erosion of civil liberties and freedom yet nobody seems to be worried about the likes of Facebook being nice and cuddly and telling us that wanting to know the colour of your toilet roll is ok-and where your using it?

    God help us all.

  • Comment number 3.

    I understand why many think this could be quite dangerous for their privacy, but it seems to me that this is pure business, and not an attempt to get into people's lives. It's true, the Internet has changed the rules on anonimity and we are more exposed as technology advances, but this isn't necessarily bad, it's just different.
    Regarding Facebook Places Deals,I find it weird that this service seems to be used by large brands only, at least so far, when it could be great for smaller businesses seeking to attract local customers.
    Maybe if this works, Facebook will start charging it and making some big money with a really profitable service for once. I found this interesting analysis on the issue on this site: [Unsuitable/Broken URL removed by Moderator]

  • Comment number 4.

    Anyone who willingly provides personal data of any type to a business that operates in a country without proper privacy and data protection legislation needs their head examining! (That is do not post anything on Facebook!)

  • Comment number 5.

    Commenter number 2 makes an extremely valid point. Many people were afraid of the potential for the government to monitor our activities through the increasing centralisation of personal data - with the personal ID card being a particular focus of these fears. My own opinion is that as we are asked submit even more of our personal information we are in real danger of giving a dubiously regulated private sector far more access to out private lives than even the government are asking for. We all know that the private sector has no use for this data other than to use it for profit and we should all be extremely wary of the long term implications of these so called 'social' schemes. I fear the mega corporations even more than I fear our increasingly undemocratic government.

  • Comment number 6.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 7.

    From the civil liberties point of view I do see a difference between the government taking liberties by demanding information and people giving it voluntarily.
    The bigger worry is the situation in the states (and I suspect less well publicised but here as well) that this information can be forced from the company by law enforcement. The people that give facebook information should understand that the US can just take that information.
    Obviously that is also the case with other places - they can be hacked as well. You will notice that I sign in here as 'anotherfakename', all the details provided are also rubbish - why - simply the BBC doesn't need the information and the BBC can't ensure its security against hacking, government or stupidity, so the BBC doesn't get it. This sort of 'registering' is common on websites, and equally pointless and also completely open to circumvention.

  • Comment number 8.

    Simple one really, if you can turn it off and be sure it's off - good.
    If not, i shall be leaving facebook.

  • Comment number 9.

    Oh great. Ads on my phone now? How long before our actual conversations are interrupted by radio-style ads? Personally, I do not want to be bombarded by ads every time I turn on my phone. Besides, given the nature of high streets these days, this is hardly likely to benefit small, local, independent businesses, is it? There aren't any left!

    This is one app I won't be getting. Facebook is getting increasingly irritating, in the same manner as the guy at parties who constantly exhorts people who are already having a good time (until he appeared) to "Heyyyyy Partyyyyyy!"

  • Comment number 10.

    From Rory: "Here's Facebook's view of your social networking future. You walk down the street brandishing your smartphone" and bam your smartphone gets snatched from right under your nose. Opportunists won't think twice when they see an owner pointing a flashy smartphone around.. One of the downsides of smartphone ownership

  • Comment number 11.

    Social Networking is a real parasite that is becoming harder to remove from society. It is the bane of life for small businesses that have employees working with Facebook when they should be working for the business. That aside, any parent letting kids use Facebook should be imprisoned for Child Abuse - it is not a toy. It is one of the most dangerous products of the Internet that we have seen for decades and it needs to be stamped out now, or at least forced to police its users. You use Facebook, you will be paying for the consequences when your data gets passed out to anyone who wants it. Shops today ...

 

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