Facebook’s New Want Button Could Drive Social Commerce Revenue
Facebook (NASDAQ:FB) is said to be working on a new “Want” button which would enable users to easily indicate the products they want to buy or be gifted. It could help advertisers gauge purchasing intent for their products and services, depending on the number of users wanting them. [1]
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By driving product sales, Facebook could tap into the huge social commerce opportunity. Social recommendations and indicators are much more effective than ads in driving sales, which is why the “Want” button could be the next big thing in social commerce. It would be conceptually similar to the Like button, but could be used by the retailers on their own websites and platforms. Whenever users “want” for some product or service on a website, it will be shared to their Facebook walls, and this could drive additional sales within their friend circles.
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Facebook would not only be able to improve its ad targeting based on the users’ wants, but also generate revenue by taking a cut off each social commerce transaction driven through its platform. We expect Facebook to become a major player in the global social commerce market in coming years.
Advertising accounts for almost 70% of Facebook’s value while Social Commerce accounts for only 5%. We currently have a $33 Trefis price estimate for Facebook, which stands just above its market price.
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