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Facebook buys mobile e-commerce app Karma

The acquisition was announced just after the markets closed on Facebook's inaugural day as a public company

By Cameron Scott
May 18, 2012 07:43 PM ET

IDG News Service - The mobile gift-giving app Karma announced Friday it has been acquired by Facebook. The announcement came shortly after the markets closed on Facebook's first day as a publicly traded company.

Karma allows users to buy gifts from its catalogue from their mobile phones. Recipients receive a text message notifying them of the gift and directing them to a website where they can exchange it if they want to and enter their shipping address.

Karma, which launched in 2011, is already integrated with Facebook. Karma draws from Facebook profiles to notify users of friends' birthdays, for example. The app will retain its functions after the acquisition, according to a blog post from Karma's founders.

The move continues Facebook's push to enhance its mobile offerings, where it currently generates less revenue per user than it does on the desktop. The app's commerce features could suggest Facebook plans to expand in that area.

Ray Valdes, an analyst with Gartner, noted that Facebook has "a strong historical pattern" of buying companies to get access to their expertise.

"I would interpret [the move] as acquiring general talent, but also experience in a particular domain, which is in this case, mobile, commerce and social interaction," Valdes said.

Cameron Scott covers search, web services and privacy for The IDG News Service. Follow Cameron on Twitter at CScott_IDG.

Reprinted with permission from IDG.net. Story copyright 2014 International Data Group. All rights reserved.
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