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Facebook Gifts Tests Social Commerce Jitters

Gifts service could open new revenue streams for retailers, but Facebook's privacy and security history could give users pause.

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Facebook is rolling out a feature that will have birthday boys and girls potentially rolling in teddy bears and cupcakes. Facebook yesterday announced Facebook Gifts, a service that allows users to send real gifts to their Facebook friends.

In the past, Facebook let users send virtual gifts to friends, but with Facebook Gifts users can buy and send real items from retailers including Starbucks, Gund, Magnolia Bakery, and 1-800-Flowers.

E-commerce is the next Holy Grail of social media. People are used to talking about their purchases and their wishes and wants on social media sites--recommending, reviewing, and otherwise discussing products--but there is still that gap between the social media platform and the actual purchase.

Will Facebook Gifts be the service that finally enables that "frictionless" buying experience for users--and the one that drives a new revenue stream for Facebook? Facebook Gifts looks promising on its face, but whether it can expand beyond gifts that can be delivered virtually seems iffy.

According to Facebook, to send a gift you go to a friend's Timeline, click the gift icon at the top, and select an item. The gift icon will also appear beneath friends' birthdays in your news stream. When you click on the link, you can choose a gift and then pay. According to an L.A. Times story, Facebook will store credit card information and will get a cut of each gift transaction. The gift can be sent publically or privately, and, once it has been sent, your friend will receive a message alerting him or her to it. If the gift is physical, such as a teddy bear, you will have to supply the giftee's address, or he or she can supply it when notified that a gift has been given. Gift cards can be sent digitally. Facebook has said that gifts can be sent from both desktop and Android platforms, and that iOS support will be added soon.

This is not Facebook's first foray into gifting, but the stakes are much higher now. Facebook went public in May, and its performance then and since then has been disappointing, to say the least.

[ Facebook is on top of the social media pack now--but can it stay there? See 5 Facebook Rivals Hot On Its Heels. ]

Will this new service be the gift that keeps on giving? Facebook Gifts would seem to be an easy way for retailers, especially small ones with limited resources, to open themselves up to a very big new market. Facebook Gifts could make it easier to congratulate friends on that promotion or new baby or new house and, at the same time, send them the flowers you were planning to send anyway. With the option to send a gift publically, I can also see how social mores might figure in here, resulting in more coffee than any one person could consume in a lifetime. ("Dave from marketing sent the CEO a Starbucks gift card for her birthday? Dang! I had better send one--worth more--too!")

But I also see some hurdles, especially given Facebook's history around privacy and security. If you were notified that you had been sent a Facebook Gift, would you supply that home address you have been so careful to obfuscate on social networks? As a potential gift giver, are you OK with letting Facebook store your credit card information? Are hackers wringing their hands as we speak, thinking of all the phishing schemes they can put into place?

Right now Facebook Gifts is available only to a limited number of users. It will roll out more widely in the weeks to come. Facebook Gifts also is available only in the United States.

What do you think of Facebook Gifts? Would it make sense for your company to offer products and services through Facebook Gifts? Would you consider giving--or getting--a Facebook Gift? Please let us know in the comments section below.

Follow Deb Donston-Miller on Twitter at @debdonston.

Cybercriminals are taking aim at your website. Is your security strategy up to the challenge? Also in the new, all-digital 10 Steps To E-Commerce Security issue of Dark Reading: About half of the traffic to e-commerce sites is machine generated--and much of it is malicious. (Free registration required.)

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