Facebook Expanding E-Commerce Services to Match New Growth

By Eric Eldon Comment

When Facebook launched its developer platform in 2007, many expected e-commerce applications to take off — the idea was that people would want to find and share products with each other on Facebook, and complete purchases.

Instead, simple sharing applications and social games were the hits. By the end of that year, industry insiders were looking towards 2008… but you have to fast-forward to this year to hear about significant results from developers.

For example, e-commerce app provider Payvment recently told us that it was adding “more than 250 retailers and roughly 10,000-20,000 products” on Facebook every day, and recently passed the 40,000 retailer mark. The company, which offers a networked set of apps for Pages, recently closed a $6 million round of funding to help it expand.

Facebook itself has been giving e-commerce new attention.

In a just-published interview with BusinessWeek, business development director David Fisch says that Facebook set up a commerce partnerships group in November, that is “meeting with retailers to help Facebook develop software that lets users solicit advice and product reviews from Facebook friends in real time, even while they’re shopping on other sites.” Fisch also says that it is working on analytics tools that will let retailers learn more about which users are drawn to which products.

It’s not yet clear how Facebook might work with or compete against third parties offering apps and other services to retailers on Facebook.

Besides Payvment, other third-party developers working with retailers on Facebook include Alvenda, ShopTab, Fluid, Yardsellr and BigCommerce.

One final note: while we’ve been tracking Facebook’s efforts to expand its Credits virtual currency, Fisch reiterates the company’s long-held stance that it has “no plans to use let consumers use Credits to buy physical products.”