Facebook shares soared to a record high on investor enthusiasm for the company’s announcement of a new e-commerce platform called Facebook Shops, and a similar program to launch later this year called Instagram Shops.
Facebook has dabbled in e-commerce before, but this time the company’s timing seems exactly right, with many small businesses either closed entirely or struggling to survive in the face of the Covid-19-related economic crisis. The move creates a new competitive front with Amazon.com (AMZN) and other online retailers, while also boosting the case for small businesses to buy advertising on the platform.
Facebook Shops will be free to sellers, but analysts think the new service will boost advertising sales by small businesses, which play an important part in the company’s ad mix.
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