February 4, 2011, 10:59 AM

Facebook lets game developers offer group-buying discounts

However, the social network says it is not taking on Groupon or LivingSocial.

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Facebook Inc. is dipping its toes in the group-buying waters by offering developers a Buy With Friends tool that lets them build in offers for virtual goods that players can share with friends.

The Facebook game Happy Aquarium, for instance, might  let players unlock a discount, such as 50% off on 45 virtual pearls, by sharing the offer with their friends. Only the consumer’s friends who also play the game will see the offer in their Facebook news feed.

When a consumer sees an offer in his news feed he can respond by either going to the game and buying the same item or making the purchase directly on the news feed.

Facebook says that it is up to developers to decide which purchases can be shared, what level of discount to offer and how long the deal should run.

Buy With Friends increases consumers' engagement, says the social network.

“More than half of the people who were offered a deal in-game decided to share it with their friends, and the engagement and the conversion rates on the resulting posts were also strong,” wrote Prashant Fuloria, Facebook’s product management director in a blog post.

The only developers who can use the tool are those selling virtual goods that are paid for using the Facebook Credits virtual currency. That’s why the effort does not represent Facebook taking on group-buying sites like Groupon or LivingSocial, says a spokesman from the social network.

The tool connects players to their Facebook buddies through the social network’s Open Graph application programming interfaces, or API. Facebook’s Open Graph allows the social network to gather information about Facebook users, both on the social network itself and from other web sites that tie into Open Graph. Tools like Buy With Friends then tap into that consumer information to let Facebook members connect with friends through programs developed by outside firms like social game makers.

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