Facebook Gifts Could Be Billion-Dollar Biz

The company's huge user base should be a boon

   

So far, Facebook (NASDAQ:FB) gets much of its revenues from advertising and virtual payments. But there is a new stream that could turn into a big money maker: gifts.

Yesterday, Facebook launched this service to all U.S. users — around 170 million total.

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So how big will the service get? Well, Techcrunch did some number crunching and the potential opportunity could be over $1 billion, assuming that Facebook gets a 20% cut and the average user makes a $15 purchase.

All in all, the assumptions seem reasonable. Facebook is a great platform to conveniently discover gifts for friends. The company also has a great assortment of brands like Starbucks (NASDAQ:SBUX), Apple (NASDAQ:AAPL), Fab.com, Mrs. Fields, Brookstone and Robert Mondavi.

In fact, over the next few years, the revenue potential could be even larger. After all, the company will likely move aggressively into foreign markets, such as in Europe and Asia.

Tom Taulli runs the InvestorPlace blog IPO Playbook, a site dedicated to the hottest news and rumors about initial public offerings. He is also the author of “How to Create the Next Facebook” and “High-Profit IPO Strategies: Finding Breakout IPOs for Investors and Traders.”  Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, http://investorplace.com/ipo-playbook/facebook-gifts-could-be-billion-dollar-biz/.

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