Facebook Inc (NASDAQ:FB), already privy to much of its users’ personal information, now wants them to share their credit card details with the social networking giant, according to the New York Times Daily Report Blog.
The largest social networking site with over one billion users worldwide, Facebook Inc (NASDAQ:FB) already stores all kinds of information about the people signed up to the service, including their email addresses, photos, political beliefs, gender, the places they visit, and who they interact with.
Now the website, with the launch of its new ‘Gifts’ service, wants users to plug in their credit card details and offline addresses so that it can become an online retail store. The new Gifts service recently underwent testing and is now being rolled out to users in the US; just in time for the holiday season.
It allows users to pay for a variety of physical and digital gifts that they can then send to their friends – for instance Starbucks gift cards, ITunes gift cards, GUND teddy bears, and products from a variety of other retailers including Brookstone, Baby Gap, and Lindt Chocolate.
The Gift service is an aggressive move by Facebook Inc (NASDAQ:FB) to significantly monetise the business and please the company’s investors after a fairly unimpressive public offering earlier this year. Amongst other things the company is also stepping up its mobile advertising targeting of users and is also greater customising targeting advertising to users based on their web browsing habits outside of Facebook Inc (NASDAQ:FB).
Although Facebook Inc (NASDAQ:FB)'s stock closed Tuesday at $26.15, still far below its IPO of $38, it is up 49 percent from its lowest point and after a predicted turnaround in recent days analysts have been issuing more bullish projections for the company.
To run the Gifts service, Facebook has created its own tracking, shipping, and inventory systems. Although the company will not report how much it will earn from each sale, merchants with a similar arrangement with Amazon give it a roughly 15 percent cut of sales.
Now that Facebook Inc (NASDAQ:FB) has a huge audience, it needs to leverage its position as one of the leading social networks in order to make as much money as possible from targeted advertising.
Colin Sebastian, an analyst with Robert W. Baird, said: “The hard part for Facebook was aggregating a billion users. Now it’s more about how to monetize those users without scaring them away.”