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Wednesday, November 28, 2012

Daily Report: Facebook Seeks Your Credit Card Number

Facebook is already privy to its users' e-mail addresses, wedding pictures and political beliefs. Now, as Somini Sengupta reports in Wednesday's New York Times, the company is nudging them to share a bit more: credit card numbers and offline addresses.

The nudge comes from a new Facebook service called Gifts. It allows Facebook users - only in the United States for now - to buy presents for their friends on the social network. On offer are items as varied as spices from Dean & DeLuca, pajamas from BabyGap and subscriptions to Hulu Plus, the video service. This week Facebook added iTunes gift cards.

The gift service is part of an aggressive moneymaking push aimed at pleasing Facebook's investors after the company's dismal stock market debut. Facebook has stepped up mobile advertising and is starting to customize the marketing messages it shows to users based on their Web browsing outside Facebook.

Those efforts seem to have brought some relief to Wall Str eet. Analysts issued more bullish projections for the company in recent days, and the stock is up 49 percent from its lowest point, closing Tuesday at $26.15, although that is still well below the initial offering price of $38.

To power the Gifts service, Facebook rented a warehouse in South Dakota and created its own software to track inventory and shipping. It will not say how much it earns from each purchase made through Gifts, though merchants that have a similar arrangement with Amazon.com give it a roughly 15 percent cut of sales.

If it catches on, the service would give Facebook a toehold in the more than $200 billion e-commerce market. Much more important, it would let the company accumulate a new stream of valuable personal data and use it to refine targeted advertisements, its bread and butter.

“The hard part for Facebook was aggregating a billion users. Now it's more about how to monetize those users without scaring them away,” said Colin Seb astian, an analyst with Robert W. Baird.