Facebook to close its Gift Shop

Social-networking site will cease allowing users to send and receive gifts from its Gift Shop on August 1.

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Steven Musil
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It's the end of the line for those drinks, birthday cakes, and pieces of flair on Facebook.

The social network announced Thursday that its Gift Shop--the feature it launched in 2007 that allows users to send personalized items to friends on the network--will close on August 1 to allow the company to focus on improving other features. Gifts that users receive before that date will continue to appear on their pages, and users will still be able to use third-party applications to send and receive greeting cards and other items.

"Closing the Gift Shop may disappoint many of the people who have given millions of gifts, but we made the decision after careful thought about where we need to focus our product development efforts," Jared Morgenstern, Facebook's product manager for games and credits, said in a Facebook blog. "We'll be able to focus more on improving and enhancing products and features that people use every day, such as Photos, News Feed, Inbox, games, comments, the 'Like' button and the Wall."

Morgenstern noted that while the Gift Shop is closing, the feature's gift credits have morphed into the site's virtual currency, now known as Facebook Credits. Late Wednesday, Facebook announced an Asia-focused deal with with payment tech company MOL Global to offer Facebook Credits for sale online and in retail stores.

As a privately held company, Facebook isn't required to publish financial performance information, so it's unknown how this feature may have financially benefited the site. But many expected the virtual-goods feature to be a cash cow for Facebook as gifts generally cost $1 (or 10 credits) to send. However large that revenue, it probably can't hold a cupcake's candle to the $835 million in revenue social games like Farmville are expected to generate this year.

The closure comes less than a year after the site announced a major overhaul of the feature, which was expected to make it a bigger player in the virtual-goods industry.