When it comes to Facebook's 500 million users, the question on everybody's mind is: how can we harness the power of these numbers into a money making platform?
And it seems that analysts and e-commerce sites aren't the only people looking towards Facebook with big dollar signs in their eyes - even Facebook itself is looking.
As the online shopping experience becomes more social, many businesses and e-commerce store fronts are looking for new ways to engage consumers torally them around a brand.
Now, it's Facebook's turn to rally.
The popular social networking site is hoping to complete the symbiotic relationship by integrating e-commerce directly into its mega social platform with new analytical tools and shopping features.
By adding e-commerce features to both attract and convert users, Facebook believes it may be able to create a new kind of shopping experience.
Hiring David Fisch to run the newly formed commerce partnerships group at Facebook, the goal is to help move the site towards a social networking / e-commerce hybrid.
Working with over twenty companies in the past month, Fisch and team in Palo Alto has been enticing e-commerce giants like Delta and J.C. Penny to use Facebook as an e-commerce platform much like they would sell goods on Amazon or Ebay.
Still, many analysts argue that Facebook in its "purest" form is not ready for e-commerce gold. The question that remains is how it can reward customers and prompt them to shop through Facebook rather than on company sites directly.
"It's not natural to go to Facebook to shop-yet," says Sucharita Mulpuru, an analyst at Forrester Research (FORR), "But it's not a long step."
Businesses clearly recognize the power of Facebook, with more than half of the top 25 retail sites like eBay and Amazon linking their sites using the "connect with Facebook" feature.
That means when a user signs into the sites with Facebook, the sites will form a list of recommendations based on the user's movie and music "like."
Even if a site isn't offering connection through Facebook, maybe of them are incorporating the "like" feature so shoppers can share products on FB or other social networks like Twitter.
In essence, the goal isn't to turn Facebook entirely into an e-commerce platform. The idea is to keep it social, while integrating new shopping features. Facebook hopes to create shopping features that let users get both advice and product reviews from friends in real-time.
That could mean gathering advice on Facebook while shopping on other sites, bringing the social networking site to new heights.
Facebook will continue to pull marketing information from "likes," giving retailers a deeper look into a user's shopping habits with built-in analytical tools.
As far as payment goes, FB currently allows gamers to purchase currency within the games that equate with real dollars but "has no plans" to let consumers use credit cards to buy physical products. This could either change down the line or become a major barrier to entry into the e-commerce space.
"It's estimated that in three to five years, 10 to 15 percent of total consumer spending in developed countries may go through social networking sites like Facebook. There's money in this for all of the players involved," said Mike Fauscette, an analyst at research firm IDC in Framingham, Massachusetts.
Although Facebook's e-commerce integration is still in the preliminary stages of development, the direction is clear.
With a growing trend in sociability and sharing on almost every e-commerce website, Facebook seems to be at the epicenter of this world. It would be silly for the company not to tap into its ridiculously huge user base and to give businesses a platform for selling, which would ultimately be beneficial for both Facebook and e-commerce.
(Via Business Week)