Monday, October 15, 2012

Facebook Inc (NASDAQ:FB) ventures to find new sources for e-commerce

Facebook Inc(NASDAQ:FB), the social networking site may be very popular amongst its users, but it does no incite the same sentiment from its investors. Since the May IPO, the shareholders have been very worried about what the company is going to do to sustain its level of growth. The advertisers have been pulling out because they find their ads to be ineffective on the site which is increasingly being used through smartphones, which do not let users look at advertisements a lot. Facebook is going to have to come up with new sources of revenue generation to keep the investors happy, and also to make sure that they do not sink anytime soon.

The site’s main income sources were the advertisers as well as games partner, Zynga. However, with the advertisers drawing out of their respective deals, facebook has decided to explore other sources of revenue through e-commerce. The idea of the “Collections” is one such attempt to earn money, by Facebook. After having tested various features, the site has some up with this one, through which the retailers can share the products which they have to offer, on the site itself. Users can browse through different kinds of products, and they can pick and buy whatever they want to. The site is currently trying to test the product for its viability, and if the feature catches on, then it will become a permanent part of the various features which the site offers.

Facebook users can look at the various products, and through the use of “Collections”, they can share with their friends as well. Seven retail names have currently been chosen for the initial part of the feature. The users who get to see the collection of products may “like” them, they may “want” them, or, they may “collect” them. Whatever option the user picks will become visible in his/her timeline, and through that, their friends will also get to see the users’ activities on “Collections”. The mechanism is very similar to that of Pinterest. Facebook is going to start off with the seven major names: Victoria’s Secret, Wayfair, Michael Kors, pottery Barn, Smith Optics and Fab.com, along with Neiman Marcus. 

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