Facebook Inc. (NASDAQ:FB) had a budding concept about becoming an effective e-commerce platform that would rival sites like Amazon.com inc. (NASDAQ:AMZN). Several years ago, as Facebook was growing in audience, there were many retailers which signed on to the social network, setting up pages and offering items that were intended to be purchased through the Facebook.com platform.
But with recent news, it seems the concept of a Facebook Mall might be a bit more elusive than anticipated. The latest piece came from start-up company Payvment, which served as an avenue to set up retailers to transact sales on the Facebook Inc. (NASDAQ:FB) platform. Payvment was building momentum up until a year ago, when some major retailers like J.C. Penney Company Inc. (NYSE:JCP), GameStop Corporation (NYSE:GME) and Nordstrom Inc. (NYSE:JWN) all pulled out of Facebook last year. Last week, Payvment revealed it was shutting down operations – selling its customer list to a rival company and sending its engineers and technology to Intuit.
What happened? It was just in 2010 when a writer for AdAge stated that Facebook Inc. (NASDAQ:FB) “is starting to look more and more like a giant, global shopping mall.” But in announcing of Payvment’s demise, TechCrunch wrote that Payvment’s struggles seemed to be the underlying challenge of all the retailers that hoped to use Facebook as an online retail platform – Facebook is very social, and it has always proven difficult to sell items in a social setting. Think of a Tupperware party among friends – a social event where people get together for fellowship, yet one person is trying to sell products. The difference is with Facebook, that those who are friends with each other are not necessarily “friends” with the retailer.
Can you say awkward?