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Social Networking Should Enable eShopping

USA Today reports that many who go to MySpace or Facebook to network with their friends also would go there to buy products and services. But for the most part, they can't.

And that means there may be billions of dollars being left on the table by the major social networking websites, according to an eye-opening survey to be released by the American Marketing Association (AMA). In a survey commissioned by the AMA, 47 percent of consumers said they would visit these sites to search out and discuss holiday gift ideas, and 29 percent said they would buy products there.

The networking sites "provide some of the most powerful word-of-mouth marketing opportunities there have ever been," says Nancy Costopulos, chief marketing officer at the American Marketing Association. "It's past the fad zone and into the reality zone."

The dollars available: $211.4 billion will be spent for online purchases this year, including travel, according to Shop.org, part of the National Retail Federation (NRF). More than one-third of all U.S. households shop online. The big social networking sites now rely on ad revenue for most of their income. But they're popular with younger consumers, a huge e-tailing revenue base, who now frequent hip fashion and electronics sites or even Amazon.com to buy online.

People who go to them would buy things, but none offers the option in a major way, says Brian Kardon, chief strategy officer at Forrester Research. Revenue from sales on the sites could be worth billions of dollars, Kardon says -- potentially more than ad revenue. Ad spending on social networking sites is now about $350 million a year and could grow to $2.5 billion by 2010, projects market researcher eMarketer.

Some 51 percent of respondents to the survey said they'd be willing to go to a social networking site this holiday season to find out about store sales -- or download coupons. The online survey of 1,098 consumers was done earlier this month by Opinion Research.

Personally, I can envision a peer group recommendation section on these websites that might be entitled "Most Popular Purchases" -- where I can view a snapshot of the recent products and services that my friends have in common. Perhaps viewing the popular items list by category, such as consumer electronics, would be helpful. Moreover, links to my friend's "Retailer Reviews" would provide beneficial insights regarding their prior customer service experience.

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