Facebook Moves Into E-Commerce, Tests Facebook Gifts
CNBC Media and Entertainment Reporter
Facebook is making a long-awaited move into a whole new revenue stream, announcing on Wednesday it's testing "Facebook Gifts" with 1 percent of Facebook's user base.
This is the first time Facebook has allowed users to buy real gifts — rather than virtual goods — and it opens the door to the world of social e-commerce.
Facebook Gifts is designed to take advantage of the fact that millions of users post birthday wishes daily on the site. And it's designed to be as frictionless and easy as possible for Facebook users to find and send gifts. (Read More: Could Facebook's Beaten up Stock Finally Be a 'Buy'?)
Facebook suggests gifts for friends next to birthday reminders or on a friend's timeline. Options include the likes of Magnolia Cupcakes, Gund Teddy Bears, or colorful Happy Socks. Presumably Facebook will be able to use all the information it has about users to offer targeted suggestions.
Facebook users can send gifts privately or publicly — we'll see if social pressure drives more spending. Once a gift has been sent, recipients can unwrap a virtual preview and open the real gift a few days later. Users don't even need to know a friend's address — the recipient provides it.
The tool is designed to make it easy to spend money — users can pay right away or add payment details later. Facebook takes a cut of all transactions, so it has incentives to find great offers for its users. (Read More: Facebook Raises Fears With Ad Tracking.)
Investors have been on the lookout for Facebook's crucial move into this new revenue stream since the company acquire a mobile gifting app called "Karma" in May.
The fact that this service is native to mobile points to the fact that Facebook is investing in new ways to make money from its growing mobile user base. (Read More: Facebook vs. Twitter, Who Has Edge in Mobile Ad Wars?)
Though this is just a small test, once people input credit card information, the potential for social commerce seems huge.
—By CNBC's Julia Boorstin
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