Facebook focuses on commerce with Tagtile deal and Offers roll-out

Focusing on mobile

Facebook is buying customer loyalty app Tagtile for an undisclosed sum as the social network continues to focus on mobile following its recent acquisition of photo app Instagram for USD1 billion, reports StrategyEye. Tagtile, founded by former VMware engineer Abheek Anand and ex-Google engineer Soham Muzumdar, enables merchants to reward customers with discounts, coupons or loyalty points for checking in at physical shops using iPhones or Android-based smartphones. The acquisition comes as Facebook also begins to roll out its ‘Offers’ service, which enables businesses to send promotions straight to users’ news feed. Both moves suggest the social network is concentrating its efforts on the mobile commerce space as it seeks to prove its business model in the run-up to its IPO. 

Facebook is keen to build up its mobile capabilities, as consumers increasingly use smartphones and tablets to access the social network, and the internet more generally. Stats from Facebook itself show that more than half its 845 million-strong user base use its mobile site and apps on a daily basis, while many consumers in emerging markets such as Africa and India are joining the social network for the first time using a mobile device, rather than through a desktop PC. Indeed, mobile has become so important to Facebook that the firm’s CTO, Bret Taylor, stated earlier this year that if CEO Mark Zuckerberg were designing the site today, it would be for phones, not computers.

The acquisition of Tagtile may provide Facebook a way of tying its location service with merchants’ brand pages, enabling retailers to benefit if a user checks-in by serving offers designed to boost loyalty. Tagtile says Facebook is buying “substantially all” of its assets, although the social network is not set to integrate Tagtile into its offering. It is more likely that this is an acquihire, with Anand and Muzumdar brought on board to work on integrating check-ins with Offers. The move ties in with the expansion of Offers, which is now available in beta to businesses outside the US for the first time in markets including Singapore, Australia, New Zealand, Japan and Turkey.

Currently, Offers only enables merchants to send users deals if they have ‘liked’ the brand’s page on the social network and not if they check-in to one of their physical locations. However, the promotions do appear in users’ news feed, giving them high priority, with users simply having to click on the deal to receive a voucher in their email inbox to use either online or offline. Any move to link up Offers and location would put Facebook in more direct competition with check-in services such as Foursquare, which already enables merchants to check-in at locations to earn rewards. It remains unclear if Facebook would take a fee for every offer redeemed via its social network, although this could be a good way for the firm to broaden its revenue sources, as well as boost engagement among both consumers and brands.

Since announcing its IPO in February, Facebook has made a number of updates to its service aimed at improving the user experience as well as boosting revenues. The firm is aiming to raise as much as USD10 billion in its public offering, the largest ever flotation by an internet company in the US in a move that could value the social network as high as USD 100 billion. 

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