Facebook shares zoom as purchase tracking and gifting service take off
Facebook closed at its highest price since July yesterday gaining more than 20 percent in one week with a new focus on revenue bringing more cash out of its services. Some thought the social network would face stormy water this week due to the largest wave of shares to hit the market yet. Instead the stock rose 22.6 percent to $23.70 after hours yesterday . The Friday rise was 6.3 percent - still a long way from its $38 IPO price, but - whew! - what a boost for investors. What's it all about? One thing is that Facebook has devised a system allowing companies to track purchases made by Facebook users who saw ads on the social network. The anonymous information will give the company hard data to woo paying customers. "Measuring ad effectiveness and outcomes is absolutely crucial to all types of businesses and marketers," David Baser, a Facebook advertising product manager, told Reuters. Another hit is Facebook Gifts. This allows members to purchase gifts for Facebook friends through the social network. It expanded to all of North America with new retail partners on Friday, after launching in a limited way in September . Partners include Brookstone , Dean & Deluca , Fab.com .,Starbucks and Flowers.com. Facebook said at a press conference in New York that “tens of millions” of users in the U.S. can now access products via the gifting service. Analyst Arvind Bhatia said the expanded Facebook Gifts was "a good first step to get into e-commerce." "In the near term, I don't expect Facebook to be selling televisions or appliances, but there are certain categories like flowers, chocolate and wine where they could add revenue," he told Bloomberg News. "People are much more comfortable with the direction and fundamentals of the company" than earlier in the year, Bhatia told the San Jose Mercury News earlier this week. Topeka Capital Markets analyst Victor Anthony told Bloomberg News, "Some of the investors are thinking the worst is behind Facebook and now is maybe the time to go long on the stock."