Facebook “Buy with Friends”: a threat to developers?

Facebook is testing a new feature called “Buy With Friends” – this feature will allow Facebook users to get discounts on virtual goods purchased by their friends. But sharing purchases to save money isn’t the only feature of Buy With Friends —it will also let one user “unlock” a deal and then share that same deal or discount with friends who can take advantage of the fact that it’s already been unlocked.

How does Facebook Buy with Friends work?

First of all a user makes an in-app purchase using Facebook’s currency called Facebook Credits, Facebook‘s virtual currency that has been around for a while. Facebook Credits, will become the official coin of the realm beginning July 1, 2011. Soon all social game developers on the Facebook platform will be required to process payments through Facebook Credits, and to share it on their newsfeed. When a friend sees a purchase they can then buy the same item at a discount directly in the newsfeed.

Are Facebook Credits a threat to Developers?

There are rumours that Facebook Credits will become the only kind of currency allowed for Facebook apps. Understandably many developers are unhappy about Facebook’s new policy mandating that they use Facebook Credits – and nothing else – for payment. Facebook will automatically receive a 30% cut whenever consumers make a purchase with the currency. Some smaller developers are now worried about the viability of their businesses’ future.

Currently, the feature only works for certain in-game purchases. The Developers will determine the items and terms of the promotion.

What next?

Facebook’s head of commerce product marketing – Deb Liu, at the Inside Social Apps Conference in San Francisco on Tuesday, said that early tests indicate that more than half of users chose to share their purchases with friends.

I would image that before long this feature will be expanded to include physical goods. The prototype is Facebook’s way of competing with the likes of Groupon and LivingSocial. Groupon was reported to have turned down a $6 BILLION investment offer from Google!

I suspect that Google will find another way of competing in the group buying arena.

Heather Buckley is Director and co-founder of IT and business training providers Silicon Beach Training. Founded in 1999, Silicon Beach Training run public-scheduled training courses in their Brighton Training Centre as well as bespoke on-site courses worldwide. Popular courses include Social Media Training, Photoshop Training and PRINCE2 Training, which has recently been launched in Birmingham. Heather writes on the Silicon Beach Training blog with a focus on IT, Project Management and Social Media as well as offering Photoshop knowledge from her experience as a photographer.