Facebook to Shut Down 'Gifts' Service in August

"We'll be using everything we learned from Gifts to explore new ways to help businesses and developers drive sales on the web, on mobile, and directly on Facebook," the company said in an emailed statement on Tuesday.

Facebook Gifts opened in 2012 as a way for users to buy gifts such as socks and teddy bears. But the service stopped selling physical goods after a year, offering only gift cards from more than 100 merchants including Starbucks Corp, Best Buy Co Inc and Barnes & Noble Inc.

Earlier this month Facebook said it was testing a special "buy" button for products advertised on the social network.

The new service, which Facebook described as a test with a "few small and medium-sized businesses" in the United States, represents the Internet social networking company's latest effort to play a bigger role in the e-commerce business.

Facebook said its new Buy button will be available on the mobile and desktop PC version of its website and will allow consumers to purchase goods directly from participating businesses.

"None of the credit or debit card information people share with Facebook when completing a transaction will be shared with other advertisers, and people can select whether or not they'd like to save payment information for future purchases," the company said.

Edited by NDTV staff from original story by Reuters