Facebook Lets Users Buy Real Things for Friends
By SOMINI SENGUPTASEPTEMBER 27, 2012
Facebook on Thursday announced a new tool that offers users the opportunity to buy gifts for one another. It is the company’s latest test of whether users are willing to spend money on the social network – and it remains to be seen whether it will make money for the company.The gifts range from cupcakes to sunglasses. Facebook will earn a slice of the proceeds from each transaction; a company spokesman declined to say how much but said each partner company had a different revenue-sharing arrangement.
Facebook already reminds users when it’s time to send birthday greetings to their Facebook friends. It will now enable them to send a gift along with a greeting. Gift-givers can pay with a credit card. Recipients will have to offer up their offline addresses so a gift can be delivered. The tool will roll out incrementally, starting Thursday, initially in the United States.
“You can post your gift to your friend’s timeline or send it privately,” the company said in a statement. “Your friend can then unwrap a preview of the gift and it will show up on their doorstep a few days later.”
Commercial transactions represent a small slice of revenue for Facebook; most of its money comes from selling advertisements on the site. But it has sought to diversify its revenue sources in recent months as it struggles to prop up its sagging share price on Wall Street. This year, it announced that it would allow users to buy products and services in their local currency, using a credit card. The main things bought and sold on Facebook are associated with virtual games.
The gift-giving application was built by the team that created Karma, a San Francisco start-up firm that Facebook acquired last May.
On offer are things like cupcakes from Magnolia Bakery ($35) and a box of pears, plums and apples from Frog Hollow Farms ($54). Warby Parker, the New York eyeglass company, has eight styles of nonprescription sunglasses to choose from, each at $95.
It is the first time Warby Parker has tried selling directly through Facebook. “If we see a lot of uptake with Facebook gifts and a lot of engagement from consumers from using the Facebook platform,” said Dave Gilboa, one of the company’s co-chief executives, “then we would feel more comfortable building a real Facebook storefront and allowing people to transact using Facebook.”
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