Tuesday, November 20, 2012

Facebook's marching into e-commerce is not about the money - YET!!

When Facebook added a slew of retail partners to its Gifts product last week - complete with a splashy party at FAO Schwartz in New York, some observers got excited about the social network's ongoing march into e-commerce, even claiming that this helped push the stock up more than 6 percent on Friday.

Photo: Face it Pages

But not so fast.

Facebook's decision allowing users to buy and send physical gifts is a shrewd move that could potentially grow into a $1 billion business (more on that in a moment). For now, however, the play seems less about boosting the bottom line and more about helping Facebook's broader goals -- namely, keeping people on Facebook a whole lot longer and getting more out of them.

In fact, Facebook Gifts is far more complex than, say, an affiliate program that simply directs customers to a merchant. For now, Linden is only saying that the Gift service is available for "tens of millions of users" in the U.S., and that he's working to bring it to more in the coming weeks. (You'd think the company would have aimed for all U.S. users for the holidays). After that, presumably, it goes global.

Read more about it at: C|net

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