Facebook Gets Physical

It was only last week when I started talking about the upcoming battle in mobile ecommerce, and then Facebook, in a shopping spree that also included Instagram (in a bidding war with Twitter that inflated the price to an incredible $1B that blows away all the charts), surprised the world by announcing the acquisition of Tagtile for a more modest (by comparison) $40M. What’s Facebook play?

A lot of speculation as been raised from this post in Tagtile’s website: “…. we’ll be reaching out to customers directly once future plans are set, but Tagline as it exists today won’t be part of what we do at Facebook.“. So what’s in it for Facebook?

Some contend that Facebook views it as a physical manifestation of a like button, turning actions into preferences. Facebook may also interested in building its location aware functionality, and this is a great way to “one up” review sites like Yelp, that have been resisting acquisition, and FourSquare since the physical location is more precisely defined. Finally another speculation is that Facebook wants to add like functions to places that don’t have addresses, a physical object at a location could be one way to do that (that’s a costly stretch, really).

My speculation? I agree that this provides a way to more precisely define a location and/or identify objects with no fixed location. However in my view the Tagtile app, which enables users to earn tags or rewards by tapping their phone against the Tagtile Cube at the point-of-sale in stores, is another example of how Facebook is building its mobile commerce strategy and it is very complementary with the launch of Facebook Offers: in this fashion Facebook is bridging the gap between Facebook-displayed ads and an actual store visits in a way that not even Groupon or LivingSocial are capable of today.

Above all… Well played Facebook! This space just keeps getting hotter…