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Facebook Unwraps Gifts Product

Could lead to larger e-commerce play

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Remember when giving someone a gift on Facebook was like sending them a really intricate emoticon? Yeah, people stopped doing that, and so did Facebook. But now the social network is hoping people will start sending each other actual gifts. Facebook today announced Facebook Gifts, which allows users to send legit presents like a Starbucks gift card or Magnolia Bakery cupcakes to their friends.

It’s not clear when exactly Gifts will go live, but it’s doubtful Facebook would want to miss the holiday season. “We are starting with a small subset of our users in the US, and this feature will also be automatically added to anyone who has received a gift. Over the next few months, we will continuously expand the product and the program to include all U.S. users as well as a growing number of merchant partners,” said a Facebook spokesperson in an email.

So sometime soon, a gift button will soon appear on users’ profiles and in the birthdays and life events notifications box. After users click the button, a grid will drop down with a selection of products to send that user. Based on the form merchants can use to list their gifts, it looks like the primary gift categories will be: food, apparel/accessories/beauty, home/design/digital subscriptions/gift certificates, baby/kids/pets and wine/beverages. Users have the option of whether they want to share a gift to their friend’s Timeline profile. After users pick out a gift for their friend—they can pay for it when sending the gift or sometime later—the friend will receive a notification from Facebook asking for their address. It’s not clear whether Facebook will fulfill the shipping of orders, but the merchant sign-up form does ask if merchants have their own shipping fulfillment methods.

While Gifts—which stems from Facebook's acquisition of gift-giving app Karma in May—is certainly a smart move for Facebook heading into the holiday season, it could also serve as the foundation for larger ambitions. The idea of Facebook commerce has floated around for a number of years, but no unified e-commerce marketplace has popped up on Facebook. Part of the problem was that Facebook users were supposedly weirded out about buying things on the social network, even though they’d been buying virtual goods via Facebook Credits for a number of years. Over the summer Facebook shut down Credits in favor of real currency, and Gifts could be a way for Facebook to get more users to add their credit cards to their Facebook accounts.

It could also acclimate them to the idea of buying products on Facebook. Gifts makes sense as a table-setter because it extends actions Facebook users already take such as posting to a friend’s profile on their birthdays or clicking the like button for engagement announcements. Facebook has seeded itself for a shopping play with Offers, but that product only has Facebook send a coupon to a user. No money is exchanged.

No word on whether Facebook will personalize gift suggestions according to recipients profile information or if it will let merchants promoted gift-giving ideas with ads on the social network, but neither would be a surprising move. Those capabilities could point to another way Facebook could approach e-commerce. Rather than a full-blown product marketplace that Facebook would have to manage, individual products could be promoted via ads as a sort of e-commerce-lite.

The Next Web reported last week that Facebook would launch a social gifting app “in the next few weeks,” and Inside Facebook reported on the same day that Facebook was hunting for a “merchant operations analyst” for an upcoming product named Facebook Gifts.

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Facebook was a bit oblique when asked to what extent gift selections could be personalized so that a giver has a better idea on what to give another user. “Our goal is to make it easy to send the perfect gift and make it so people receive more gifts they enjoy," said a spokesperson. Imagine no longer having to worry about getting an ugly sweater for Christmas because now you can swap it  for something you do want.

"To do this, we look at what people are giving in aggregate and sort by gender and age to help make next recommendation,” the spokesperson explained. If a recipient isn’t crazy about a gift, they can swap it out before giving Facebook their address.

Merchants won’t be able to promote gift-giving ideas through ads—at least for now. As for whether a more general e-commerce marketplace is in the pipeline? “Nothing further to share here,” the spokesperson said.