Facebook partners with retailers to test "want" button

By Alexei Oreskovic

SAN FRANCISCO, Oct 8 (Reuters) - Facebook Inc istesting a feature that lets users of the social network create"wishlists" of home furnishings, clothing and other retailproducts, laying the groundwork for what some believe could bean eventual push into e-commerce.

Facebook said it is working with seven retailers, includingPottery Barn and Victoria's Secret, to test the new feature thatwill allow certain users to flag images of desired products byclicking a special "want" button.

"People will be able to engage with these collections andshare things they are interested in with their friends. Peoplecan click through and buy these items off of Facebook," Facebooksaid in a statement.

The feature, which Facebook has dubbed Collections, couldhelp Facebook play a bigger role in the online commerce marketby encouraging its 1 billion users to buy products for theirfriends and by sending shoppers directly to online stores.

A Facebook spokeswoman said the company does not receive afee when someone purchases a wishlist item on Facebook from aretailer's site.

But Robert W. Baird analyst Colin Sebastian said the newCollections feature could open up new sources of revenue forFacebook, whose stock has taken a drubbing as concerns about itslong-term money-making prospects have mounted.

"E-commerce is one of the best ways to monetize theInternet," said Sebastian.

"Thinking about how large they are as a platform and howengaged people are, there are lots of levers they haven't pulledyet in terms of monetization," he said. In addition topotentially collecting a transaction fee for referring users toan e-commerce site, Sebastian said that retailers might also payFacebook to promote products featured on users' wishlists,similar to the way the Facebook's current ads function.

Shares of Facebook, finished Monday's regular session down2.4 percent at $20.40. Earlier on Monday, BTIG analyst RichardGreenfield downgraded Facebook to a "Sell" rating.

In a note to investors, Greenfield cited concerns about thecompany's advertising business, particularly Facebook's nascentefforts to expand the business onto the mobile devices that itsusers increasingly access the service from.

Facebook's new Collections feature will gradually be offeredto 100 percent of its U.S. users, Facebook said.

Some users will see the "want" button as part of the test,while others will see a button inviting them to "collect" anitem or to "like" an item.

Unlike Facebook's existing "like" button, the feature thatFacebook is testing will showcase the "liked" item within auser's Timeline profile page.

Facebook is also testing the Collections feature with NeimanMarcus, Michael Kors, Smith Optics, Wayfair and Fab.com.

(Reporting By Alexei Oreskovic; Editing by Bernard Orr)

((Alexei.Oreskovic@thomsonreuters.com)(415 677 2511)(FollowAlexei on Twitter @lexnfx))