Facebook Ramps Up Big E-Commerce Drive

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Facebook shopping is still tiny. Retailers that use Alvenda reached a daily record of $100,000 earlier this month. That translates to about $1.16 in sales a second. That compares with about $2,000 a second at San Jose-based eBay.

Investors expect social commerce growth to accelerate. Eventbrite promotes events that range from yoga classes to conferences on Facebook and Twitter, directing consumers to its own site to buy tickets. It raised $20 million in October during an investment round led by DAG Ventures. Last month, Payvment got $6 million in a round led by Sierra Ventures. "The goal is to become as big as eBay and Amazon (AMZN)," Vispi Daver, a partner at Sierra Ventures, says in an interview. "Payvment's growth has far surpassed all kinds of expectations."

Payvment, which is still developing its business model, doesn't impose fees on buyers or sellers. Alvenda, on average, charges $5,000 to $10,000 a month for custom Facebook store set-up and maintenance. EBay charges fees for placing an ad and for when an advertised item sells.

Top Retail Sites Linking to Facebook

Even sites that compete with Facebook for the attention of Web users are lining up behind its social commerce efforts. More than half of the top 25 retail sites, including eBay and Amazon, have linked their sites to the social network in the past year, Facebook says. Shoppers who go to Amazon.com can log into Facebook and get recommendations for purchases based on their declared tastes in music and movies.

On Nov. 1, eBay rolled out Group Gifts, a way for Facebook friends to chip in together for a gift. Users can also share listings with Facebook friends. "We will continue to add options for integrating shopping into social networks, and sharing listings and other eBay pages," eBay spokeswoman Johnna Hoff says in an e-mail. Seattle-based Amazon didn't return requests for comment.

In three to five years, 10 percent to 15 percent of total consumer spending in developed countries may go through sites such as Facebook, said Mike Fauscette, an analyst at research firm IDC in Framingham, Mass. He says: "There's money in this for all of the players involved."

Kharif is a reporter for Bloomberg Businessweek in Portland, Ore.

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