Facebook launches gift card business

SAN FRANCISCO — Facebook Inc. is rolling out a new product: gift cards.

The move is an expansion of its Gifts program.

Initially, the preloaded cards will be accepted only by Jamba Juice, Olive Garden, Sephora and Target.

Facebook is targeting a multibillion-dollar business as it tries to regain the confidence of investors who continue to be worried about the company’s moneymaking potential.

During a Wednesday call with analysts to review its fourth-quarter financial results, Facebook founder and Chief Executive Mark Zuckerberg said the company is still figuring out its gifts and retail business. He warned that revenue from these businesses would be just a trickle for some time.

But investors are pinning their hopes on Facebook’s making a major play in commerce.

“There are many [gift card and reloadable prepaid cards] issued by Visa, MasterCard and American Express that have more flexibility in where you can use them and where you can reload them, so Facebook is getting into a very saturated space with a limited offering,” Wed- bush Securities analyst Gil Luria said in an email.

How the Facebook gift cards work: Users send the cards to their friends through Facebook’s Gifts program. Once a card is purchased, the friend is alerted. A few days later, the friend receives a card in the mail. The gift card user can keep track of the balance online. One card works with all of the retailers and can have multiple balances, say for bread sticks at Olive Garden or a box of diapers at Target. The balances can be monitored on Facebook mobile apps.

Gift cards usually top consumers’ wish lists, which is why Facebook is adding them to its Gifts program. The gift card program is being rolled out gradually, and right now it’s only available in the U.S. But it’s not an experiment — this appears to be a business that Facebook is very sure about.

Facebook has looked to expand its footprint into the physical world before, by rolling out its own cards loaded with a virtual currency that could be used in social games and applications on its site.

Called Facebook Credits, the cards were available at retailers such as Target and Wal-Mart. But Facebook shut down the program.