Facebook ending Gifts program, still dabbling in e-commerce

Facebook is shutting down its digital Gifts business … even as the social network is continuing to experiment with other forms of e-commerce.

The company has dipped its toe in the retail waters several times: Two years ago, Facebook launched a program that allowed users to buy actual, physical goods – like wine, cupcakes or toys – and have them delivered to friends. The notion was that Facebook knew when someone’s birthday was coming and could remind his or her friends to send a gift.

Facebook shut the program down a year later, however, when sales didn’t catch on. But it continued to sell digital gift cards that could be applied to purchases at a number of retailers. (Facebook briefly also sold physical gift cards that would work at certain stores.) Now it’s winding that service down, effective Aug. 12.

“We’ll be using everything we learned from Gifts to explore new ways to help businesses and developers drive sales on the web, on mobile and directly on Facebook,” a company representative told Reuters.

In recent weeks, however, Facebook has tested a “Buy” button that would let other companies sell directly to Facebook users through ads on the social network. Top executives say Facebook is now focused more on helping other companies sell products.

“I think commerce is really important … but I don’t think people should confuse that with Facebook selling things directly,” chief operating officer Sheryl Sandberg told analysts on a recent conference call.

Still, she added:

“The more people buy online, the more people buy things they discover through their mobile phones (or) discover things from their News Feed and go on to purchase, the more important we are in driving e-commerce and I think we are increasingly important.”

CEO Mark Zuckerberg added that Facebook will also gradually expand its efforts to process online payments on behalf of other companies, although he stressed, “Our main business is advertising.”

 

Brandon Bailey Brandon Bailey (350 Posts)

Brandon Bailey covers Google, Facebook and Yahoo for the San Jose Mercury News, reporting on the business and culture of the Internet.