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Facebook Unveils Gift-Giving Feature to Add New Revenue Source

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Sept. 27 (Bloomberg) -- Facebook Inc. unveiled a gift-giving feature that will let users buy and send items to their friends without leaving the site, as the owner of the world’s most popular social network seeks new ways to add revenue.

The gift service is starting off in the U.S., and will have hundreds of options with more added daily from partners such as Starbucks Corp. and 1-800-Flowers.com Inc., the company said. Facebook, which acquired gift-giving application Karma earlier this year, will share an undisclosed percentage of the revenue with partners.

“Every day, millions of people share special moments with their friends on Facebook by saying ‘Happy Birthday,’ ‘Congratulations,’ or simply, ‘I’m thinking of you,’ ” Facebook said in a statement. “Now there is another way to celebrate those moments.”

Facebook, under investor scrutiny about its ability to make money from its more than 950 million members, is adding features to boost revenue. The Menlo Park, California-based company is also facing competition for user attention and advertising from rivals such as Google Inc., Yahoo! Inc. and Amazon.com Inc. Facebook reported in July that second-quarter sales increased 32 percent, down from growth of 45 percent in the previous three months.

Using Facebook Gifts, users can pay immediately or add payment details later. Recipients can choose the color, size or flavor of an item or exchange it for something else. Gifts include cupcakes at Magnolia Bakery in New York or gift cards from Starbucks. The service lets members choose whether to post the gift to a friend’s Facebook Timeline or alert them privately.

To contact the reporter on this story: Brian Womack in San Francisco at bwomack1@bloomberg.net;

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net