Facebook trials "Collections" feature for retailers

Facebook has unveiled a new feature to improve businesses' ability to advertise products targeted at user interests.

The company said that the Collections feature would allow users to tag products and group items into "wishlist" collections, which can then then be browsed by friends or linked to product purchase pages.

According to a report from AllThingsD, Facebook is currently testing the feature in a trial run with a small number of retailers and different options for labels and page tags.

The feature could provide a new option for online retailers to interact with customers on the social networking site, allowing users to target potential purchases and organise items for future purchase or potential gifts.

The Collections feature could also provide Facebook with a much-needed source of additional revenue. The company has in recent months been looking at new features and potential service charges which could bring revenues beyond the company's traditional advertising structure.

The lack of potential revenue sources has been cited by industry pundits in fuel worries over the company's long-term financial outlook. The much-anticipated initial public offering (IPO) fell flat and executives were widely criticised for their handling of the event.

Since the IPO, Facebook's share price has dropped below $20 as the company has struggled to pick up revenue sources.