Facebook: Manufacturing Scarcity and Minting Money

April 12, 2007

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Sold out! How do you sell out a digital product? Why would you sell out of a digital product that can be infinitely reproduced, distributed at no cost and sold at pennies per transaction?

A few weeks ago the queen of social networks, Chazbot, pointed out a new feature introduced on Facebook called “Gifts”. These are small graphics that you can purchase and give to a friend to place on their profile. Facebook is charging a dollar for each 73 X 62 pixel image, which seems pretty high for what can only be an impulse buy. Perhaps even more interesting then Facebook’s brazen attempt to monetize its user base is the method they are employing to do it. Not only have they set out to sell online nick-knacks to the digital generation at a hefty price, they have tried to mimic offline notions of scarcity to do it.

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