Friday, September 28, 2012

Facebook Inc (NASDAQ:FB) Shares Soar On launch Of new gifting service

Facebook Inc (NASDAQ:FB) has now got into the e-commerce area with its gifting service.

Probably with an eye to the gifting-giving season that is round the corner, the social networking site launched the Gifts service on Friday. The feature is built upon and run by Karma, the company that Facebook had acquired in May.

Robert Hof, Forbes contributor, who was one of the privileged few to get the service (it is being offered to a select few) says that while the service looks good (in terms of the process), he may not really use it much due to the limited gifting options that it offers.

"A lot of the most prominent gifts are pretty vanilla–teddy bears, spa appointments, flowers, cupcakes," he says.

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The gifting service has the tagline "real friends, real gifts" but the products themselves seem to be impersonal and could be anything that anyone can pick up from anywhere. There's no exclusivity about the available gifts, nor is there anything original.

"Products, especially gifts, are not necessarily fungible, and all the less so for close friends for whom you’re supposed to be getting something special," writes Hof.

The origin of these products is also not revealed or from which merchant. For all we know they could be some cheaply produced goods from China, in which case their quality could be suspect, especially if people are sending toys for children. Closely related to this is the issue of reliability of merchants from whom the products are sourced.

Shipping costs are not revealed until right at the end of the transaction and that could make prospective customers wary about what they might ultimately end up paying for the service.

Shares of FB soared 5.60% to $21.45 in early trading and outperforming the broader market.

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