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By Oren Laurent
President, Banc De Binary
As online shopping becomes the norm for a growing number of today’s Internet users, Facebook wants in on the action. The social platform acquired TheFind last week, a retail search engine, which is its latest buy in the profitable e-commerce space. Shopping addicts had better watch out: when innocently browsing friends’ photos, you could soon be tempted to indulge in purchases that you didn’t previously know you wanted.
With a handsome $12.6 bln in annual ad sales in 2014, Facebook is already a dominant player in the online retail industry. The newest acquisition shows that it sees further potential in e-commerce. We only need to look at the tech giant’s statement for a clear indication of its motives and future plans: “TheFind’s talented team has built a successful search engine that connects people to products. Together, we believe we can make the Facebook ads experience even more relevant and better for consumers.”
In other words, TheFind’s e-commerce search features will soon be integrated into the social platform; the advertisements that you see will be customised to your interests and previous online activity. Facebook may also adapt TheFind’s algorithms to stop displaying products which were already purchased. Facebook hopes that by suggesting relevant and appealing items, you’ll be more likely to splash your cash. Of course, following this improved user experience, a percentage of the payment will go straight into their pocket. That’s smart marketing – if it works.
Following the announcement on Friday, Facebook shares slid 5 cents after the stock market closed. Investors are clearly mindful of the fact that this isn’t Zuckerberg’s first attempt to expand his search and digital advertising services. He unveiled GraphSearch in 2013 but the search engine failed to live up to the hype, his plan to encourage retailers to sell goods via their Facebook page crumbled, and Facebook’s birthday gift shop was shut down last year after a heavily publicised launch.
Can his new venture procure better results? Although you may be right to be skeptical, it’s worth noting that Zuckerberg has finally switched his strategy. He has now bought out what he failed to successfully build in-house, and will employ many of the leading contributors and programmers in TheFind’s experienced team. At the same time, Facebook is currently testing a ‘Buy’ button on brand pages which facilitates direct purchases and has already been keenly adopted by many advertisers.
Facebook knows from its rival, Google, just how much money can be made via online search and shopping, and the tech giant is determined to maximise its vast market share.
The saying goes that business success often comes after several failures and lessons learnt; Zuckerberg and his investors must be hoping that’s the case here.
