On May 18, Facebook announced it had acquired mobile gift-giving app Karma. There was other Facebook news that day, but lost in the hullabaloo was the fact that the deal was the social network’s second-largest acquisition to date. It totaled more than $80 million, according to two people familiar with the transaction who asked not to be named because the deal’s terms were private.
Karma is a 16-person startup that debuted its first smartphone app in February. But unlike past acquisitions, where Facebook bought small companies mostly for their talented engineers, the social network plans to continue running Karma’s service and regards the purchase as an important step into the business of online commerce, say the sources. It’s also a bet that gift-shopping, a multibillion-dollar industry that still takes place mostly in shopping malls, is about to get shaken up by Silicon Valley.