According to this article, Facebook spent $80 million in May to buy Karma, a gift buying start up. Now we know why.

You will soon be able to send actual, physical gifts to your friends through Facebook. Your friends’ personal info will let you know when there’s a birthday or a wedding, and Facebook will provide the option of sending them a gift. All you do is pay, and your friend will receive a notification which lets them fill out the shipping info, or even choose options for their gifts, such as colour or size.

Considering that gifts are a hundred-billion dollar industry, I think this is going to be big. It may not be popular right away, but I suspect it’s going to be too convenient to ignore. As the article says, we already do everything on Facebook–would it be so difficult to pay for gifts through Facebook as well? Especially if you were planning on  getting your friend something through the Internet anyway. This way, there will be fewer shipping address mishaps and incorrect colour preference speculations.

This new development also opens up an opportunity for advertising, as companies will want to invest more into advertising on Facebook so that their products are considered when users buy gifts, which may ultimately help the Facebook stock prices. I think acquiring Karma was a good move.