Will You Click on Facebook ‘Buy’ Button?

Facebook Inc (NASDAQ:FB) said Thursday that it is testing a new “Buy” button on ads and page posts for desktop as well as mobile users. The feature is being tested with a few small and mid-size businesses in the United States. The new “Buy” button will let users buy directly from their news feed, without having to leave the Facebook platform. The social networking giant is hoping that the feature would lead to more impulse buying, boosting the sales of advertisers.

Will You Click on Facebook 'Buy' Button?

How will Facebook handle the users’ credit and debit card information?

Facebook has dipped its toe in the e-commerce in the past, but with limited success. The Menlo Park-based company has more than 1.2 billion users worldwide, representing a huge opportunity for merchants. Sources familiar with the development told Reuters that the social networking giant isn’t taking a portion of the revenue for goods sold through the Buy button in the testing stage.

With almost everything Facebook does, there is a big concern over user privacy. The company has violated privacy policies several times in the past. So, why should users trust Facebook with their credit and debit card information? Well, the company said it will safeguard the credit and debit card information, which won’t be shared with other advertisers. However, Facebook will rely on a third-party payment processing company to process transactions.

Incorporating e-commerce makes sense for Facebook

But why is Facebook pushing into the e-commerce market? Haydn Shaughnessy of Forbes said that the move was widely expected. The brick-and-mortar retail is in a long decline due to the emerge of online retail. And the future of online shopping is in online communities, says Shaughnessy. Moreover, online advertising rates are falling consistently. Even Google Inc (NASDAQ:GOOGL) (NASDAQ:GOOG) has reported ad rate declines. The search engine giant hasn’t reported a YoY increase in cost-per-click (CPC) since Q3, 2011.

Therefore, platforms with a huge amount of user information are looking to build e-commerce into their platforms. It makes perfect sense for content owners to incorporate buying opportunities directly into their sites.

Facebook shares jumped 2.04% to $67.76 at 12:26 PM EDT on Friday.

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About the Author

Vikas Shukla
Vikas Shukla has a strong interest in business, finance, and technology. He writes regularly on these topics. - He can be contacted by email at [email protected]

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