Facebook Offers no longer free
The social-networking giant now charges merchants to posts ads along with deals on its site.
Facebook Offers aren't free for merchants anymore. As the company seeks new ways to increase revenue, it has started charging businesses to run deals on its site.
The social networking giantas a free service that allows business to send promotions directly to user news feeds. A company's Facebook fans are able to redeem vouchers for discounts.
The offers remain free for users to redeem, but Facebook now requires merchants to spend at least $5 on related ads to accompany their vouchers, the company said today. The amount charged will depend on the budget of the business and how much it would like to spend to boost its offer, a Facebook spokeswoman said.
"The new features will help people find the most relevant Offers, such as in their local area, and help businesses better measure the success of their Offers," Facebook said in a statement. Reuters earlier reported the change to Offers.
Both before and after its IPO in May, Facebook faced questions about its ability to grow and to make money. Chief among the worries is doubt about, as well as concern about a slowdown in advertising.
Today's move heightens competition with other daily deals sites, such as Groupon and LivingSocial. Such companies provide new offers to subscribers --or fans, in Facebook's case -- each day, typically with discounts. Through the deals, merchants are able to attract new customers, while the site provider typically shares in the revenue. But increased competition in the area is pressuring Groupon and its rivals.
Facebook declined to provide details about the number of companies participating in Offers, the number of vouchers offered, or other related information.
A spokeswoman said Facebook hasn't shared any data about Offers but said it has been a "very popular offering" since Facebook released it earlier this year.
The company said some other changes to Offers include the ability to add a bar code or a unique code to an offer, which allows businesses to better track results and enables companies to run offers for e-commerce sites. Offers is also now available globally to all merchant pages with more than 400 fans.
The changes are effective immediately, Facebook said.
Updated at 8:15 a.m. PT with comments from Facebook and additional details about the changes.