Just ahead of Black Friday — the day after Thanksgiving and the official start of the holiday shopping season — Facebook is broadening its e-commerce platform, Facebook Gifts, to include a wide range of big name retailers and digital content companies. The social network presented the announcement at a press conference at FAO Schwarz, the famed New York City toy store.
Placing himself in front of the store’s big step-on piano, Lee Linden, Facebook’s head of product for the Gifts division, discussed the new promotions involving “hundreds of gifts from new retail partners” including babyGap, Fab, Brookstone, Dean & Deluca,L’Occitane, Lindt, ProFlowers, Random House, Inc. and NARS Cosmetics. Facebook members will also be able to give other members streaming and download access to TV shows and music with subscriptions to Hulu Plus, Pandora, Rdio and others.
The wider reveal of Facebook’s Gifts platform comes as the social network has been working assiduously to generate ad revenue through its Facebook Exchange and promotions business following its IPO filing in May. That same month, Facebook acquired Karma, a mobile gift-giving app co-founded by Linden, who had previously helped start “incentive-based” lead gen app provider Tapjoy. With Facebook Gifts, the social network isn’t just betting on e-commerce, it’s also looking for its surest way to prove that it can drive mobile revenue.
While not all of the retail deals are firmly in place yet — Facebook noted that wine purveyors Robert Mondavi Winery and Chandon are preparing to join the list of participating sellers — CEO Mark Zuckerberg told investors last month during the company’s Q3 conference call that Gifts reflects the natural use of the social network and is something he has high expectations of.
“People already send millions of birthday messages a day using Facebook, and a lot of them have asked to be able to do more,” Zuckerberg said at the time. “Gifts provides us with the opportunity to learn about how people buy things and will hopefully help us build better services in the future.”
While Linden noted that giving to charity is also a part of Gifts, as the tragedy associated with Hurricane Sandy demonstrated, there was no discussion of what kind of revenue would be produced. But the timing could hardly be better. And unlike, say, pushing ads into the News Feed, which some Facebook watchers regard warily and has engendered a certain degree of caution in the social network’s executives, there appears to be little downside to expanding Gifts.
The rollout of Gifts can also serve another competitive purpose, namely, blunting display ad rival Google’s deeper immersion int0 e-commerce and the search giant’s attempts to take share away from Amazon. As the economy remains fairly weak, especially in the northeast due to the hurricane, anything that takes the friction out of shopping for friends and family is likely to do pretty well. In any case, the details of Facebook Gift’s performance will be one of the main highlights of the social network’s Q4 earnings, for good or bad.
