Facebook (FB) to Enhance eCommerce Ads, Buys TheFind

Facebook, Inc. (FB - Analyst Report) recently reported that it has acquired online shopping search engine TheFind Inc., based in California. The financial terms of the deal remain undisclosed.

TheFind, launched in 2006, has become a popular search engine for shoppers as it offers personalized search results and recommendations for its users, acting as a bridge between people and products. Facebook intends to tap the potential of the booming e-commerce market by incorporating the capabilities of TheFind in its advertising service.

Facebook will be leveraging TheFind’s technological expertise to make its ads more relevant and in tune with user requirements while simultaneously cutting down on ads that are no longer relevant to users.

On the other hand, TheFind will benefit from the phenomenal exposure of the platform, which will enable it to scale up and drive growth. However, the TheFind website will be pulled off as per the deal.

The social media giant has been eyeing the e-commerce market for a while. However, the company’s prior attempts like Facebook gifts, tie-up with retailers and direct shopping endeavors have not been fruitful.

In fact, the e-commerce market is dominated by key players like Amazon.com Inc. (AMZN - Analyst Report), eBay Inc. (EBAY - Analyst Report) and more recently, Alibaba Group Holding Ltd. (BABA - Analyst Report) is making itself felt. So adding to its existing capabilities to gradually edge into the space seems like a good idea.

This apart, Facebook has also launched a number of new features and applications for its platform. Launched last month, its Product Ads feature allows retailers and marketers to showcase their product catalogs to people efficiently. Facebook also launched a separate Ad manager app for iOS users.

Most recently, the company unveiled its latest tool called Topic Data which is designed to provide their marketing partners with more information about what their customers are talking about. This in turn will enable marketers to better advertise their products on Facebook and other channels.

The aforementioned acquisition will further boost Facebook’s ecommerce capabilities, supplementing its already-strong and growing advertising business.

In the last-reported fourth quarter results, the company’s advertising revenues soared 58% on a year over year basis to $3.7 billion. The growth was driven by increasing mobile engagement, higher number of marketers, continuing investment in new products and robust performance of its newsfeed ads. Furthermore, of the total advertising revenues, Mobile ad revenues surged 108% to $2.5 billion thus contributing around 69% of total ad revenues.

Recently, Facebook revealed that its active advertisers’ base achieved a milestone by crossing the 2 million mark. We believe that given the platform’s massive user base and access to personal information, the company is just getting started.

Though the news is a positive, it failed to impress this Zacks Rank #3 (Hold) company’s investors as shares slid 12 cents (0.15%) in the afterhours trading session on Friday. 

Facebook (FB) to Enhance eCommerce Ads, Buys TheFind