Friday, November 13, 2009

A Fool and His Money Are Soon Parted

‘Tis the season to be jolly…. and very stupid, apparently.

At a time when 10% of the American population is unemployed and formerly middleclass kids and families are sleeping in cars and homeless shelters, scrambling for their next meal, there’s are whole new world being created that is the antithesis of our value driven society – it’s a nothing for something world where people are forgoing their daily Starbucks fix for, um, nothing.

Virtual gifts, the gifts that do not keep on giving are popping up everywhere, reports the New York Times. For a couple of bucks, daft people are paying online companies to send their loved ones pixilated images of the gifts they choose to send. Not a real gift, just a picture of it. I’m sure it goes something like this:

Abbey, the gift receiver:
“Really Dick, you shouldn’t have gone to sooooooooooooo much trouble on my birthday. The picture of these beautiful black dahlias are so lifelike, really! And I didn’t know dahlias came in black – what a double surprise. I’ll cherish this jpeg for all eternity.”

Dick, the cheapskate:
“Np sweets. You already have so much ****ing crap all over your apartment, I didn’t want to waste my money, I mean your space on something…. um, superficial. This virtual gift transcends our innate desire to have tangible things to show for our hard-earned money. Down with shallow consumerism. Will you sleep with me now?”

Although little money changes hand per transaction and there is no actual product being delivered, the virtual gift giving business is proving to be a very big deal indeed. Lightspeed Venture Partners’ Jerry Liew has invested $10 million in virtual gift giving. The marginal cost for each transaction is zero, so these companies are reaping unheard of profit margins – 100%. More fool us.

In the US this year – a year of widespread economic failures and foreclosures - it’s estimated that $1 billion dollars will have be spent on sweet nothings – and $5 billion worldwide! $5 billion dollars, come on people! How can we whine about the cost of healthcare and bank bailouts when we’re squandering $1billion dollars on absolutely nothing. There is no stimulus or jobs creation going on here, that is for sure.

One rather sad shopper who plays Pet Society on Facebook with her sons used a credit card to buy $20 worth of the game’s currency. She spent it on a “virtual haunted mirror and a potion that helped their pet, Demon Baby, grow bat wings.” She explained that it was cheaper than taking the kids to Target and buying them actual toys. Can anyone tell me what is so dreadfully wrong with this picture? I promise I won’t buy you a day-pass to Playfish if you do.

Maybe it’s me who is wrong? Perhaps this is a godsend for Christmas shoppers who have weathered a disastrous year and genuinely can’t afford to shop at Macy’s or Penney’s for everyone on their list?

On second thoughts, I don’t buy it. Anyone wanting to send a gift to me this year had better make it real – even if it’s a homemade cookie or a collage of embarrassing photos from school days I’d rather forget. To me, that says you’re not a fool and that you really do care, ticket price notwithstanding.

Better still, save your dollars and send them to someone who could truly use them – like those families that have nowhere to live, instead of the VC groups laughing at you all the way to the bank.

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