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Facebook looking to beef up e-commerce team

By Caroline McCarthy
Facebook is looking to boost its payment operations team, but is this move a belated development?
Facebook is looking to boost its payment operations team, but is this move a belated development?
STORY HIGHLIGHTS
  • Facebook posts "Payment Operations Strategist" job ad
  • Company is ready to devote project team to payments, columnist says
  • Facebook has experimented with e-commerce, mostly with "Gift Shop"
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(CNET) -- Facebook is turning up the heat on becoming a big player in the online payments world, according to a couple of job postings for a new "Facebook Payment Operations" team that recently appeared on its site.

The social network is seeking a "Payment Operations Strategist" to "work cross-functionally with the Product and Engineering teams to design tools and systems to serve our hundreds of millions of users and our ever-growing base of advertisers," as well as a risk management specialist to be based in its Dublin, Ireland, office to handle billing, payment, and security operations in European and Middle Eastern countries.

"Projects driven by Payment Operations team members will potentially contribute millions of dollars to Facebook's business, as well as enable the company to scale and expand its operations in the coming years," the careers site explained.

This is no surprise: Facebook has wanted to get into the "payments" business for years now. There used to be a plethora of rumors about a PayPal-like product called "Facebook Wallet," bolstered when Facebook hired Benjamin Ling, who had spearheaded the development of Google's Checkout product. Internal politics got in the way; Ling left his post at Facebook and returned to Google.

Another thing that could have stalled this development is that in 2008, when rumors of the "Facebook Wallet" project were swirling around, there was also a strong common wisdom that neither Facebook nor any other social-networking site could make significant profits from advertising revenue -- even Google came out and said that it was a poor choice for ad dollars.

The onset of a global advertising recession and reports that Facebook was thirsting for more venture funding didn't help much, either.

With that kind of press in the air, it would seem logical that Facebook would choose to pursue an alternate revenue stream to supplement advertising, but it didn't.

It's pretty clear that Facebook did, in fact, come to the conclusion that it could build up a successful advertising product and so chose to focus on that.

Payments moved to a back burner, despite some critics' admonishments that it was a poor business decision to ignore such a potentially lucrative source of revenue -- especially as Facebook's developer platform and Facebook Connect extension were launched as free products, too.

And ultimately, Zuckerberg & Co. surprised everybody. Backed by the revenues from social games buying ads to amass more players, as well as marketing for the "fan pages" that increasingly have become a must-have for brands, the company announced in September that it had become cash-flow positive several months ahead of schedule.

With advertising operations at Facebook now stabilized, it looks like the company is finally ready to devote an entire project team to payments: there are a few on board already, like engineer Ivan Kirgin, who joined Facebook at the same time that he shut down his Twitter-based micropayments start-up, TipJoy. (According to AllThingsD's Peter Kafka, Facebook had extended an offer to acquire TipJoy and then retracted.)

Roots in the Gift Shop

Facebook has been experimenting extensively with forms of e-commerce for some time now, mostly in the form of its "Gift Shop" -- a sort of Petri dish for micropayments.

Originally launched as a way for members of a far-smaller Facebook to shell out a dollar for a silly image to display on a friend's profile, the Gift Shop has since become the launch pad for its "credits" system, a non-profit donation initiative, and an expanded array of virtual goods that include music files.

A big Facebook developer conference scheduled for April, some speculate, may see the splashy launch of a final product.

The complication for Facebook is that even though its payments plans finally appear to be getting a green light, it may still be a belated development.

The bigger Facebook gets, the more difficult it becomes for it to launch something completely new -- just look at how much prelude was required for the rollout of the social network's new privacy settings, which proved controversial regardless.

With no in-house product in place to process user payments, a smattering of virtual-currency start-ups have entered the space instead, and getting developers to switch over will require Facebook to offer a really unbeatable alternative.

Another question is whether the focus of the completed Facebook payments product will be as geared toward the social gaming industry as some were anticipating a few months ago.

Social gaming companies like Zynga and Playfish (now owned by Electronic Arts) have proven to be some of the biggest moneymakers on Facebook's payment platform, due largely to the sales of virtual goods, but there have been some signs that they're not eternally loyal to Facebook: Farmville, the most popular of Zynga's games, now also operates at Farmville.com in addition to Facebook's platform. The same goes for Playfish's Pet Society.

Facebook may very well see it fit to turn the slant of its developer dialogue away from gaming for the first time in months, and instead take a gamble on widespread media industry predictions that online news sources may start charging for access.

If micropayments for, say, Wall Street Journal articles were processed through a Facebook Connect button, that would be a big deal.

These will be a few of the challenges for Facebook's new hires.

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