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Summary:

Social networking giant Facebook is rolling out a new gift-giving service that enables users to exchange physical gifts entirely through its platform. The new feature is based on technology Facebook acquired when it purchased the startup Karma in May.

Facebook Gifts

Four months after buying mobile social gifting startup Karma, Facebook is today unveiling a new service that enables users to exchange physical gifts entirely through its platform.

Called Gifts, the service lets Facebook users choose from an online selection of items, which range from Starbucks gift cards and magazine subscriptions to whimsical knick-knacks and artisan foods, and then pay for the present and notify the recipient. Gift-givers can choose to alert friends through public posts or private messages and, when the receiver is notified about the gift, she provides the address for delivery.

Given Facebook’s purchase of Karma, the new feature isn’t a surprise, but it could mean big returns for the company. Not only is it Facebook’s first major step into e-commerce – which has only really dabbled in payments through virtual goods and social games – it gives Facebook users a reason to use the platform from their mobile devices. As has been widely covered (here and elsewhere) Facebook is under pressure to build and monetize a mobile audience.

Starting today, Gifts will be rolling out slowly, first in the U.S. and then globally, the company said. For now, users can click on “gifts” icons on friends’ timelines from Facebook’s desktop and mobile websites and Android phone, but the company will be expanding to iOS soon.

Facebook won’t be alone in the social gifting world — startups like Wrapp, Boomerang and Treater already use the social network as a gifting platform — and other companies, like giants Amazon (a AMZN) and eBay, are already leaders in e-commerce. But considering how much data Facebook has about its users, including birthdays, anniversaries and other gift-giving occasions, its latest endeavor has big potential.

The convenience factor is high given how many people already get birthday reminders through the site. But it will be interesting to see how comfortable people are with handing their credit card information over to Facebook.

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  1. It is interesting to see how Facebook has integrated Karma into its offering and time will tell how successful it becomes, but clearly it’s not the end point since there are some major drawbacks.

    1. It’s Costly. The Karma model, which Facebook has adopted, is to offer expensive products from a limited selection…you still have to pay shipping and handling for physical items so the costs add up quickly!
    2. It’s Not Social. There’s no option for a group to contribute to an individual gift, which means I have to pay the full amount. For close friends and family, I might spend $30 or more….but not on all my Facebook friends.
    3. It’s Limited. Granted I can choose a gift from their catalog….and the receiver can change it. They may be trading just to get something better, but it doesn’t mean that’s what they really want…just better than what you selected.
    4. It’s Facebook only. What if I have friends on LinkedIn, Google+, or even people who don’t use Facebook (yes, there are some)?

    If you want a truly inexpensive, social, and cross platform gifting solution that lets the recipient get exactly what they want, then check out http://www.zPerfectGift.com. You can chip in as little as $5 towards any gift….invite friends and make it a group gift. The recipient transfer the funds onto a gift card of their choice and buys exactly what they want. It’s completely free too and works across Facebook, LinkedIn, Google+ or with any email address. A much, much better gifting solution!

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