Los Angeles -- As all eyes set on its IPO, Facebook has continued its M&A activity by buying its way into social commerce, the social networking giant has just acquired mobile gifting app Karma for an undisclosed sum.
An app for 'in-the-moment gifting', Karma, which is portrayed as a social and mobile gifting service, enables you to send everything from a bottle of wine to a fuzzy teddy bear to friends via SMS, email, and Facebook.
“We are thrilled to announce that Karma has been acquired by Facebook,” the company says on its blog. “The service that Karma provides will continue to operate in full force. By combining the incredible passion of our community with Facebook's platform we can delight users in new and meaningful ways.”
The way San Francisco-based Karma works is pretty simple. Karma offers a smart way to get ideas and send gifts to friends and family members. It collects data from Facebook to determine demographic information and recommend the most appropriate gifts for your loved ones. Using the app, you can sift through a virtual storefront to pick out a gift. Karma has partnered with companies including with Hulu, Gund, MoMa and Spotify –- so there is a pretty decent selection of gifts.
In fact, it would be interesting to see how Facebook uses this. It could be a pretty interesting layer to Facebook as an ecommerce platform. Facebook released the following statement:
“We have been really influenced by the Karma team and all that they have accomplished in such a short time. This acquisition combines Karma's passion and innovative mobile app with Facebook's platform to help people connect and share in new and meaningful ways,” a Facebook spokesperson said in a statement.
On the other hand, the moment you find the perfect gift, you can create a virtual card and send your present to your recipient via text, email, or a message on his or her Facebook wall. As the person receiving the gift, you can choose to accept it -– and provide Karma with an address where you would like your gift shipped -– or you can trade the gift in for something else in Karma's store. You can even choose to give the monetary value of the gift to charity.
The service, launched in February 2011, on iPhone and Android, is hardly months old, but indicating that something about the company’s gifting technology or mobile appeal certainly hit a nerve with Facebook.
A post from the Karma team on the Karma blog says, “Over the last year, we have developed a new e-commerce platform from the ground up. We have been honored to partner with amazing brands to create a well organized catalog of products. We made those products instantly giftable in a brand new way. And we utilized the power of Facebook's social media network to ensure you never miss a chance to show someone you care. The phenomenal response and feedback we have heard from customers has more than exceeded our expectations. And we are just getting started -- today we take social gifting to the next level.”
Interestingly, its captivating interface and dead-simple system were great features on their own, but Karma worked with your Facebook profile in order to analyze when you might need to send a gift and for what occasion (i.e., it is your cousin's wedding or your brother's graduation).
This latest acquisition also echoes Facebook's recent string of deals: all mobile-focused. As a matter of fact, the company's future is hinged on its ability to either adapt to or adapt mobile, and it has been busy bringing innovative, quality mobile app companies under its umbrella -- such as Lightbox and Glancee (of course, Instagram cannot be forgotten). Whether to harness the power of the team behind these products or leverage their astounding platforms, it is all a part of its attempts to improve its mobile strategy.