Facebook Rolls Out Online Gift-Giving Service

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Back in May, Facebook (NASDAQ:FB) acquired Karma, a pioneer in the social gifting space. Now, the company is putting that deal to work. Facebook launched a feature today that allows users to buy gifts for friends. The company is teaming up with 100 merchants, including coffee king Starbucks (NASDAQ:SBUX) and 1-800-Flowers (NASDAQ:FLWS), for the service. There will also be an app for it in the near future.

So far, e-commerce has been incredibly tough on the Facebook platform. After all, users visit the site primarily to hangout and check photos and make comments. If they want to buy stuff, they will instead use Amazon (NASDAQ:AMZN) or Fab.com.

But Facebook’s gift service may be different. Basically, it is something that is inherently social. What better way to build relationships than to send out a gift for someone’s birthday or some other type of special event?

There may also be some synergies with newly-acquired Instagram, which has about 7.3 million daily active users — more than even Twitter. Perhaps sending a photo and a gift?

All in all, the gift service could certainly provide meaningful revenues in light of Facebook’s huge user base — something the company needs to do to get its mojo back on Wall Street. In fact, in today’s trading Facebook’s stock is up about 5% to $21.35.

Tom Taulli runs the InvestorPlace blog IPOPlaybook, a site dedicated to the hottest news and rumors about initial public offerings. He also is the author of “All About Short Selling” and “All About Commodities.” Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.


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