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Twitter Moves Us Closer to True Social Commerce

Twitter is racking up mid-market companies to facilitate shopping right from the social feed.

What can a rapidly growing, mid-market social network expect to gain by purchasing a payments service? Another foothold in the rapidly evolving and potentially lucrative world of e-commerce.

Twitter recently acquired CardSpring, a San Francisco-based startup for an undisclosed sum. Cardspring is a web service API that offers payment companies and retailers a way to create loyalty programs and discount coupons for online and mobile shoppers. The company recently launched CardSpring Connect as a way to serve up data on shoppers’ buying habits to help merchants understand the connection between online or mobile purchases and in-store transactions. Location-based social app Foursquare partnered with CardSpring to offer Visa and MasterCard holders discounts and deals after they checked in.

Rather than just partner with CardSpring as FourSquare and other social sites have done, Twitter bought the company right on the heels of announcing it acquired Tap Commerce for just under $100 million last month. The New York-based mobile ad tech firm delivers “retargeted” ads based on web browsing history. If you visit eBay to hunt for an elusive auto part, for example, TapCommerce will then display another, related product from eBay in an app or other website the company works with.

Twitter had partnered with Amazon in May to facilitate shopping from its feed via the hashtag #amazoncart. Though Twitter certainly won’t turn up its nose at giving its 271 million monthly active users a reason to stick around longer, the company’s shopping spree hints at how much it’s betting on the larger evolution of social shopping.

The Amazon partnership was a first step because it let shoppers add products to their virtual carts from the hashtag in a tweet. The buck stopped there, though, as users couldn’t actually complete the transaction within the tweet. If the sheer number of abandoned shopping carts across the web is any indication (73.9 percent don’t make it to checkout) the chance of losing the sale at this point is great as the customer must click over to another site to complete the purchase. It’s a conundrum also faced by the 91 percent of retail brands feeding product photos to Instagram, which, while touted as a powerful selling tool, doesn’t have the functionality to let people shop within its feed.

With CardSpring and Tap Commerce, Twitter is poised to deliver a one-two punch to e-commerce. Not only will users be sent a stream of relevant product ads to whet their shopping appetite, but they’ll also likely get further incentive from deals and discounts delivered to their feeds. For Twitter, this added revenue channel could begin to fill the hole left by operating losses of $67 million from the first half of 2013 and an accumulated deficit of $418.6 million—larger than last year’s revenue of $316 million.

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