I don’t often write posts that relate to “current events,” but this one was interesting enough and I think has a pretty valuable lesson when it comes to making money online. As reported in this article by TechCrunch earlier this month, Facebook will be closing its virtual gift shop on August 1st. I was never one to purchase these virtual gifts (I guess that makes me virtually cheap?), but this gift shop had to have earned Facebook millions of dollars in “passive” income.
Facebook’s explanation for the decision to close this gift shop was odd at best, stating that they wanted to “focus more on improving and enhancing products and features that people use every day.” The crazy thing is, people had no problem spending $1 on an icon to place on someone else’s profile. They are pointless from my perspective, but I have no doubt that if money was being spent on them, they were providing some people (probably millions of people) with value.
Why would Facebook kill this cash cow? Do they simply hate money, or is there something we can learn from this? Clearly, this wasn’t standing in the way of their developmental efforts, despite what they said.