Facebook buys visual shopping startup GrokStyle
Facebook bought visual shopping startup GrokStyle to strengthen its artificial intelligence (AI) technology, according to a report from Bloomberg. GrokStyle’s technology was integrated into Ikea’s mobile app to identify and suggest products in its catalog after shoppers used their smartphones to take pictures of furniture and home decorations.
GrokStyle posted a message on its website that said "we are winding down our business"
and "moving on as a team" without mentioning Facebook. The social network announced the acquisition, but didn’t disclose a purchase price.
Facebook earlier this month bought the team that started the blockchain technology company Chainspace. The social network purchased at least four companies last year, such as startups that developed messaging and AI technologies, Bloomberg reported.
Facebook said GrokStyle will contribute to the company’s AI capabilities, which have been a key focus for the social media giant for several years. While it’s not known how GrokStyle’s technology will fit into Facebook, the startup’s focus on AI applications for retailers likely can play a role in the social network’s e-commerce ambitions. That includes Facebook Marketplace, a combination of online merchants and classified listings that resembles Craigslist. Facebook said in a blog post that 800 million users come to Marketplace each month to buy and sell goods.
Facebook last year started earning money from Marketplace by letting users pay to "boost" a listing to more users looking through their news feeds. The social network let businesses extend their existing news feed, video, Instagram, Messenger and other ad campaigns to Marketplace, TechCrunch reported.
While AI could help Facebook create more relevant shopping experiences for users, a key challenge with this strategy will be gaining consumer confidence so that shoppers feel comfortable purchasing and sharing financial data, a long-term issue for the platform that has only intensified following months of privacy-related scandals. Facebook might also be interested in integrating GrokStyle's technology on Instagram, where expanding shopping capabilities has been a focus for a while.
The acquisition of GrokStyle is likely small compared with Facebook’s takeovers of Instagram and WhatsApp in billion-dollar deals that have helped the company to significantly expand its user base. The social network also buys companies opportunistically to add technologies and build out new features.