| MENLO PARK, Calif. Sept 27
MENLO PARK, Calif. Sept 27 Facebook Inc
is taking a small step toward becoming an e-commerce platform by
launching a feature for users to buy and send real gifts worth
as much as hundreds of dollars.
As of Thursday, users can purchase and ship products from
more than a hundred "Facebook Gifts" vendors with a few clicks
on the company's website. The products include eyeglasses by
Warby Parker, Starbucks coffee, and pastries from New York-based
Coming four months after Facebook's troubled initial public
offering, the feature marks the company's attempt to unlock a
potentially significant new revenue stream.
Although it has sought to diversify its income sources,
Facebook still relies heavily on display advertising. During the
second quarter, more than 80 percent of its revenue of $1.18
billion came from ads while roughly 15 percent came from
game-maker Zynga Inc.
Facebook, which can store credit card data for users, will
make money by taking a cut of each gift transaction. The amount
varies based on the individual deals it has struck with vendor
partners, the company said without disclosing specifics.
The world's No. 1 social network, boasting nearly 1 billion
user accounts, has long viewed commercial transactions as a
massive opportunity for the platform. But marketing researchers
have found that consumers have been slow to make purchases on
the website because many treat it as a place to chat and post
messages rather than go shopping.
Facebook hopes to change that by getting users used to the
idea of giving small gifts as part of their social routine.
"People already use Facebook to communicate with their
friends and share all of their life moments," said Lee Linden, a
Facebook product manager heading the Gifts feature.
"Gifting is just a natural extension of that behavior. It
makes a lot of sense for us not to just say 'Happy Birthday' but
to send a gift, not just say 'I love you' but send some
Current gifts cost $5 up to several hundred dollars for a
Jambox stereo by Aliph Inc, said Linden, who joined the company
in May. His previous start-up, Karma, was acquired by Facebook
in a deal announced on the day of Facebook's high-profile IPO.
Facebook had experimented with a "virtual" gift-exchange
feature years ago, but shut it down in 2010. The original gifts
were no more than digital trinkets, cartoon images of flower
bouquets, teddy bears and even women's underwear.
Linden said Facebook now aims to provide effortless shopping
and shipping of real goods. Users are alerted when their
packages are shipped and received, and every package comes with
a customizable card stamped with a Facebook logo.
Recipients who do not like their gifts can discreetly swap
colors or sizes for no charge.
"We think we can make an end-to-end way to buy a product
that is very seamless," Linden said. "We take care in the
photos, in the packaging, in everything."
The service will be initially available to a random group of
U.S. users logging into Facebook through its website and an
Android app. An iPhone app is still in development, Linden said.