September 1, 2009, 12:00 AM

Facebook finds a friend in e-retailers, and maybe a new revenue stream

Facebook is testing the selling of products from retailer partners through its new Gift Shop.

Facebook last month began testing selling products from outside merchants through its site. The king of social networks has opened its Gift Shop hub to a handful of retailers that are marketing both virtual and physical goods that can be purchased without leaving Facebook.

Four merchants, or what Facebook calls developers, are part of the alpha test: American Greetings Interactive, GreetBeatz, Someecards and Real Gifts. A spokeswoman says Facebook may open the program up to other retailers this month.

Members of the social network have for some time been able to purchase Facebook credits and use them to buy virtual goods at the Facebook Gift Shop. Users can enter payment card information and receive 10 credits for $1. For example, consumers might purchase a birthday cake icon for a friend to post on his profile page, usually for a dollar or two.

This new trial allows Facebook members to use their credits to buy goods from outside merchants, and it also marks the first time the store has offered hard goods. Retailer Real Gifts, for example, is selling flowers at the social shop. When checking out, the shopper enters where they would like the order to be sent, as if they were shopping at a traditional e-retailer.

"We see Facebook as another way to reach consumers looking for social expression content," says a spokesman for American Greetings Interactive."We will be assessing the performance of the content and reviewing our offerings on a regular basis."

Justin Smith, editor of the blog Inside Facebook, says the service adds another revenue stream for the social network beyond advertising. Facebook takes a percentage of each sale made at the shop, he says, and he believes many merchants would be happy to pay to reach such a broad audience. Facebook declined to comment on the fees associated with the test.

katie@verticalwebmedia.com

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