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Facebook is ending the week the way it started it: by buying a mobile start-up. This time, it’s customer loyalty service Tagtile, and while it didn’t disclose a price, I’m guessing it’s far less than $1 billion. Facebook confirmed that it has acquired substantially all of the assets of San Francisco-based Tagtile, which will continue to serve its existing customers but is not taking on any new clients.
Tagtile offers a customer loyalty system for merchants built around a small, free box equipped with a sensor that allows consumers who have downloaded the Tagtile app to tap it with their phones. Users are able to receive loyalty points, offers and rewards from the merchant and easily share about the business on Facebook or Twitter from their phone. It’s a simple way to establish a user’s location at a business without asking them to do an actual check-in. And it can be easy way to get a consumer to share about a store through social channels in exchange for a deal or reward. TechCrunch wrote about the service when it launched a pilot in October and what was interesting at the time was that the service utilizes unspecified sensors in the phone to register a tap instead of using near field communications or NFC.
The deals makes sense as Facebook, like many others, are looking to tap the huge opportunity in local commerce. Facebook on Friday coincidentally expanded its roll out of its beta Offers service to a limited number of businesses in Australia, Japan and a few other countries. Brands and businesses can run offers on their pages for free and can push out out offers on other parts of Facebook for a fee. Users who claim an offer can get it forwarded to them for redeption online or in-store use.
Having a company like Tagtile will give Facebook more expertise about how to approach businesses and convince them to use a valuable service for engaging with their customers. If it can tie its online offers to Tagtile’s service, it will give businesses a way to redeem those offers in-store and show them how effective their offers were. But I’m not sure how much of the acquisition is really about the TagTile box long term. NFC phones are coming, and you can already establish a user’s location inside a store and reward them with QR codes. Foursquare is doing this through check-ins and Shopkick is as well through its dedicated audio hardware.
This highlights just how busy this market–delivering offers and enhancing loyalty via mobile devices–is going to be. Most of the mobile payment services will also be offering some form of deals, coupons and rewards. That’s going to be a key way to entice people to use a mobile payment system. This might be a stretch, but if Facebook ever decides to pursue its own mobile payment offering, the experience and intellectual property of Tagtile might be helpful. Facebook is doing more with its credits and there’s the potential that at some point, it will want to get into the mobile payments game.
But overall, it shows that Facebook is thinking more about mobile, one of its blind spots. While the acquisition of Tagtile is nothing like Instagram, it again highlights the importance of mobile devices to Facebook. And the purchases show that Facebook is ready to open its pocketbook to gain ground in this critical area.