FB: Facebook shares hit 3-month high after gift sending initiative expands
Photo credit: Bloomberg News | The Facebook Inc. logo is displayed at the company's office in New York. (Dec. 20, 2011)
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Facebook: One billion servedFacebook Inc. closed at the highest price in more than three months after expanding the roster of retailers that let users buy and send items to friends on its website, helping the owner of the world’s biggest social network push into e-commerce.
Partners added include Brookstone Inc., Dean & Deluca Inc. and Fab.com Inc., Facebook said at a press conference Thursady in New York.
"Tens of millions" of users in the U.S. can now access products via the gifting service, which was introduced in September with retailers such as Starbucks Corp. and 1-800- Flowers.com Inc. Shares of Menlo Park, California-based Facebook rose 6.3 percent to $23.56, the biggest close since July 27.
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Facebook is seeking fresh ways to make money from its more than 1 billion users as sales growth has slowed. Since an initial public offering in May, the shares slipped 38 percent as Facebook has struggled to convince investors it can boost advertising sales as more users access the service on mobile devices, while also grappling with competition from Google Inc., Yahoo! Inc. and Amazon.com Inc.
"It's a good first step to get into e-commerce," said Arvind Bhatia, an analyst at Sterne Agee & Leach Inc. "In the near term, I don't expect Facebook to be selling televisions or appliances, but there are certain categories like flowers, chocolate and wine where they could add revenue."
LIFE'S MOMENTS
The new feature lets users find and send gifts from a birthday reminder or from a friend's profile. Recipients can choose the color, size or flavor of an item or exchange it for something else. The service also lets members choose whether to post the gift to a friend's Facebook Timeline or alert them privately.
"There is nowhere people go more to share life's moments than Facebook," said Lee Linden, product lead for Facebook Gifts and founder of Karma, the gift-giving application Facebook acquired earlier this year. "It's a huge milestone for the team, and something we think people are very much going to enjoy."
Sales rose 32 percent to $1.26 billion in the third quarter, Facebook reported last month, matching the growth rate of the previous three-month period. In the third quarter of 2011 sales more than doubled from a year earlier.
