I'm super bullish on this. I think this will end up being FB's first big cash cow. I never thought advertising was anything more than a stop-gap to cover costs, Zuck has always hated ads. Personally I thought their big revenue stream would probably be to start charging for FB Connect, but this makes more sense. They are basically hooking in at the right point of intent to convert a user, which is exactly why Google can print piles of money.
This is just step one. Once they get this working they are going to have all kinds of purchasing behavior and really be able to weave their way into all sorts of ecommerce scenarios. Their biggest challenge is going to be fulfillment (you don't want a birthday gift showing up late) so they are probably going to be very selective in who they partner with and are going to roll this out very slowly, since first impressions being good is essential.
Edit: Also there are all kinds of social experiments they can run to optimize conversions with this. If someone you know buys a gift for your friend, you are going to feel more pressure to do so. Etc.
I'm sure this is going to come up repeatedly: what can they offer me from an eCommerce perspective that Amazon can't? Like most social network benefits, I think friend recommendations, which I can and do get in real life, are overrated and useless for the majority of my purchases.
The gifting idea is quaint. But to be full-on eCommerce site, well that's yesterday's news.
This is going to turn Facebook into the Amazon for gifts. They capture you exactly at the right point, can (eventually) give pitch-perfect recommendations, and can get the checkout flow down to be completely painless. If they execute on this well (and I expect they will) I would guess most gift purchases will be happening on Facebook in a few years.
I wonder what will make the world more ready for this than it was for Beacon back in the day (Amazon purchases automatically showing up in the News Feed).
This is just step one. Once they get this working they are going to have all kinds of purchasing behavior and really be able to weave their way into all sorts of ecommerce scenarios. Their biggest challenge is going to be fulfillment (you don't want a birthday gift showing up late) so they are probably going to be very selective in who they partner with and are going to roll this out very slowly, since first impressions being good is essential.
Edit: Also there are all kinds of social experiments they can run to optimize conversions with this. If someone you know buys a gift for your friend, you are going to feel more pressure to do so. Etc.