Photo: By Justin Sullivan/Getty Images
While the world was focused on Facebook’s stock trading for the first time on public markets, the company quietly announced the acquisition of Karma, a social gift giving mobile application.Karma, with just 16 employees, appeared to be another one of Facebook’s talent grabs.
It is not.
Karma was Facebook’s second biggest acquisition, going for a reported $80 million. It will be Facebook’s attempt to tackle the potentially lucrative market of social commerce.
Karma imports Facebook data about your friends. It then suggests gifts for those friends based on Facebook postings. It’s still in the early stages, but the potential for this application is huge. This could be a truly social e-commerce experience, posing a threat to Amazon, which dominates online retail.
Considering that Facebook’s ad business has not exactly blown the doors off, it’s smart to find new streams of revenue.
Karma is just starting, but it has a lot of promise. We’ve played with the app for a little bit and we were impressed. We think you will be too.
You can flip through the app to see gifts you can give. These are REAL, physical gifts, not virtual goods
It's not just birthdays. When someone is promoted, or had a bad day, Karma suggests getting a present
We don't really feel like getting a present for those people. Instead, let's get something for Steve Kovach!
Karma has to increase its catalogue, and ramp up its users, but there is real potential to crack social commerce.
If Facebook can make this work, it could have another big stream of revenue.