Facebook buys Face.com for undisclosed sum

Facebook Inc. said Monday that it has acquired facial-recognition technology company Face.com for an undisclosed sum.

Face.com is a three-year-old firm based in Tel Aviv, Israel, that has developed technology used for facial recognition on photos loaded onto websites and through mobile applications. The company has released two apps used on Facebook (US:FB) called Photo Finder and Photo Tagger.

Shares of Facebook closed up nearly 4.7% to $31.41 on Monday. The stock has gained more than 20% since sliding close to the $26 mark earlier this month after a disappointing IPO on May 18, at which the stock debuted at $38 per share.

In a brief statement, Facebook said the company’s technology “has helped to provide the best photo experience” for people sharing photos over the social network.

“This transaction simply brings a world-class team and a long-time technology vendor in house,” the statement read.

Michael Pachter of Wedbush Securities said he acquisition would likely drive up the number of”mobile tags” on Facebook, improving user engagement on the social network.

Facebook draws practically no revenue from the increased usage of its network through mobile devices. Most of its revenue comes from display ads shown on PCs accessing the site.

“We view the Face.com acquisition as being in-line with Facebook’s strategy to strengthen its mobile presence,” Pachter wrote, adding that mobile revenue growth “will a key driver of the company’s overall growth as users supplement their usage on PCs with usage on phones, tablets, and other mobile devices.”

The deal comes about two months after Facebook’s acquisition of another photo-sharing service — Instagram — that was worth about $1 billion in cash and stock.

(Published by The Wall Street Journal - June 18, 2012)