Alex St. John (pictured) is president and CTO of social network Hi5.
Facebook announced last week that it is shutting down its virtual gift store officially on Aug. 1, stating that it wants to “focus” its resources on the Facebook Credits online payments system instead. Its Credits system gives third-party companies who run games and other applications on Facebook a uniform currency for selling virtual items on the network. “We made the decision after careful thought about where we need to focus our product development efforts,” said Jared Morgenstern, product manager at Facebook.
Those parties who understand e-commerce recognize this announcement from Facebook as a declaration of defeat. Clearly, if Facebook was GOOD at e-commerce and selling virtual gifts, it wouldn’t be shutting down its storefront, it would be staffing up to do both. See Industry Gamers for more.