After being one of the most buzzed about Facebook partnerships, it’s interesting to see the service pulled only 7 months after first launching. There’s no doubt that music gifts present Facebook with a significant source of revenue potential (the exact figure we’re not sure of). Now the question is whether or not Facebook will start searching for another partner to fill this void.
Right now Facebook is in the midst of trying to push out the Open Graph as the platform for the semantic web and while revenue is extremely important, the bigger question is whether or not there is a strong enough business to justify other partnership discussions. My guess is that Facebook easily sold millions of dollars in music gifts each year, but with Lala most likely taking a significant cut, there’s no telling how lucrative it was for Facebook.
Here’s what a Facebook spokesperson told us about Lala’s disappearance:
We recognize that sharing music plays an important role in how people stay connected and express common interests on Facebook, however, as a result of Lala being shut down as of May 31st, the service will no longer be available in the Facebook Gift Shop.
People who purchased a websong from the Facebook Gift Shop will be reimbursed with credits that may be used towards other Facebook Gift Store purchases, or to spend on games and applications on Facebook that accept credits. We will not be reimbursing MP3 gifts, since they were already downloaded by the recipient.
Source: All Facebook
Wednesday, May 12, 2010