Facebook’s ‘Like’ button becomes force in e-commerce

Whether you just bought an airline ticket or a pair of jeans online, chances are an Internet search preceded the transaction. Now Facebook hopes to make its vast web of online social connections another central ingredient in the complicated dance between retailer and consumer. One year after Facebook began distributing its "Like" button to millions of websites - an average of 10,000 websites a day connect with Facebook - the Palo Alto social network says it is becoming a force in online commerce. Facebook points to partnerships with companies like Levi’s, which has a Facebook Like button positioned next to every article of clothing on Levi.com, and Ticketmaster, whose website includes a Facebook app that lets people see whether their friends have already bought a ticket to concerts they are interested in attending. Just as people have always talked to their friends before making a significant purchase, "your mode of discovery online is starting to look more like your mode of discovery offline," said Dan Rose, a former Amazon.com executive who is vice president of partnerships and platform marketing at Facebook. Facebook and Ticketmaster say that when the ticket retailers’ customers post a specific event they are attending or might attend to their friends’ Facebook News Feed, it generates $5.30 of direct ticket sales.

Meanwhile, a report from Harris Interactive and CityGrid Media said that the Like button is already trumping reviews onwebsites such as Yelp as the primary way that people show support for businesses online. Facebook took another major e-commerce step last week when it rolled out a trial "Deals" service in the San Francisco Bay Area and four other U.S. cities to compete with Groupon and other online discount deal websites. The Like button is a prominent feature. Still, some skeptics say the Like button won’t ever become the mainstay of e-commerce that search is. A recent survey of online retailers by the market research firm Forrester found that 59 percent said the returns from social marketing remain unclear, while just 28 percent said social marketing strategies had helped their business grow. "The problem is the fundamental flaw of this whole expectation. People think that shopping is social, because teenagers go to the mall in groups," said Sucharita Mulpuru, the Forrester analyst who wrote the recent skeptical report about Facebook’s future in e-commerce. "But most shopping is not social. People don’t go to Walmart in groups. They don’t go to the grocery store in groups.“ While Mulpuru says there are niches where Facebook can become a major force in e-commerce - ticketing for example, because concerts, baseball games and other events are inherently social - those successes will be the exception rather than the rule.