Facebook Acquires Social Gifting and M-Commerce Startup Karma

by , May 21, 2012, 8:25 AM
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Karma-BWhether in celebration of its Friday IPO or Saturday’s wedding of founder Mark Zuckerberg, Facebook has added another mobile acquisition to the pile with the purchase of the year-old social gifting company Karma. The e-commerce startup creates a curated catalog of products that mobile app and Facebook users can send directly to their friends. You pick a gift from the app-based catalog, add a card and send it via SMS, email or Facebook.

The app advertises its convenience, in that it can gift anyone from anywhere without the sender having specific shipping information on the recipient. When the gift-getter receives notice of the gifting, he or she can make color or flavor choices, even swap the gift for an alternative from the catalog or convert the gift to a charitable donation. The getter then enters the shipping info, which Karma fulfills.  

The acquisition is significant in that it not only gives Facebook an interesting e-commerce revenue stream but further enhances its mobile footprint. While the newly IPO-ed company has been criticized widely for its lack of a mobile ad strategy, Facebook seems to be establishing its mobile presence mainly through acquisition. In addition to its high-profile $1 billion purchase of Instagram, Facebook has also acquired mobile media companies Lightbox, a photo-sharing app for Android, and location-based people discovery app Glancee this year.

The acquisition was announced on the Karma Web site by founders Lee Linden and Ben Lewis, who previously had developed TapJoy. “We’re thrilled to announce that Karma has been acquired by Facebook,” the two founders announced on the blog. “The service that Karma provides will continue to operate in full force. By combining the incredible passion of our community with Facebook’s platform we can delight users in new and meaningful ways. As we say … only good things will follow.” 

1 comment on "Facebook Acquires Social Gifting and M-Commerce Startup Karma ".

  1. Bill Egan from eGifter
    commented on: May 25, 2012 at 2:37 p.m.
    Good article. We sure wish the Karma folks luck! Apps for social commerce and especially social gifting are certainly taking off. We're really glad to hear that! It seems like there is a lot of room for innovation here. We also believe in the social gifting model. Facebook provides a great platform for the spread of egift cards. For retailers, Facebook apps like MyGiftWand is a powerful tool that helps them leverage the social network to reach a targeted demographic by providing special incentives to users based on the age, gender and location of the recipient. For consumers, the fact that social gifting is easy, fast and fun makes it a big win.

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