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Facebook Aims to Become Next Big Thing in E-Commerce

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Mobile Answers Featured Article

December 20, 2010

Facebook Aims to Become Next Big Thing in E-Commerce

By Susan J. Campbell
TMCnet Contributing Editor

Facebook wants to serve as an e-commerce site and to grab the attention of retailers everywhere, is ramping up its efforts. According to a recent Businessweek report, the social networking giant would like to convert its 500-plus users to online shoppers.

Managers for the company have met in the past month with more than 20 different retailers and other companies in order to help them set up shop on its pages and build tools that will enable Web users to interact while making purchases.

With the addition of this e-commerce feature, Facebook is hoping to attract users and keep them logged on longer, thereby generating higher advertising sales. This increased focus has the potential to turn the company into an online shopping alternative for those who are used to using eBay. And, while it isn’t natural to go to Facebook (News - Alert) to shop – this move presents a natural next-step.

David Fisch, who runs a newly formed commerce partnerships group at Facebook, set up his team in November in a division that includes groups that are focused on gaming and media. His team is ultimately responsible to prove they can create a lot of value for users.

To accomplish this, Fisch’s group is meeting with retailers to help Facebook to develop software that will enable users to ask for advice and product review from Facebook friends in real-time, even if they are shopping on other sites. Facebook also hopes to build analytic tools that will enable retailers to learn more about who is drawn to certain products.

Alvenda, a Minneapolis-based start-up that offers technology to help companies sell products from Facebook pages, is providing assistance to Fisch on his e-commerce drive. Alvenda helped in the opening of the shopping site HauteLook and airline Delta. J.C. Penney also recently added features that enable fans to interact while they buy clothes and other products.

Payvment (News - Alert) is another startup that is helping retailers to channel their wares through Facebook. Software provided by this company enables users to turn Facebook pages into storefronts that will accept a credit card or eBay’s (News - Alert) PayPal online.

Even with these movements, however, shopping on Facebook still remains tiny. To provide an idea, retailers using Alvenda reached a daily record of $100,000 earlier this month, which translates to about $1.16 in sales per second; eBay produces about $2,000 in sales per second.

As of right now, Facebook does have a long way to go to present any type of threat to eBay, but this could happen. Much of the traffic driven to e-commerce on Facebook could be determined by the depth and breadth of services offered for both retailers and consumers.

In other Facebook news, TMCnet recently reported that the company’s integration with takes video personalization to the next level. 

Susan J. Campbell is a contributing editor for TMCnet and has also written for To read more of Susan’s articles, please visit her columnist page.

Edited by Tammy Wolf

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