Facebook is fast becoming a money-printing machine on top of a very successful product. The latest multibillion dollar opportunity in front of them, after advertising and Credits, is e-commerce, and BusinessWeek has a good rundown of their latest efforts there.
E-commerce can be a boon to Facebook because when someone buys or recommends a product, that action can spread to their friends, which helps retailers make money. And affiliate marketing is a well honed and time-honored way to make money by facilitating e-commerce transactions.
Facebook hasn’t tried too many things around e-commerce since the Beacon disaster, partly because of the memory of that disaster and partly, we think, simply because they had so many things on their plate, but it’s an obvious new market for them to tap into.
The company’s e-commerce strategy right now has two planks. The first is to help purchases and recommendations be more social social. They’re working with e-tailers to build tools that solicit recommendations from users and help them go viral.
The other big front is turning brand Pages into storefronts. Since people who like Pages opt-in to receive messages from that brand into their news feed, it makes complete sense to facilitate transactions within these Pages. And Facebook can then take a cut, either directly through affiliate fees or indirectly through advertising used to promote that Page.
It’s smart, it makes total sense, and it can be a huge new business line for Facebook.
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