In this week’s Internet Retailing Roundtable, Daniel Golding of Tier 1 Research discusses the effectiveness of retail websites that include social networking options.
TWST: Does this convergence of retailing and social networking work or does it become offensive to the people who want social networking?
Mr. Golding: I think it works wonderfully. I think it works best when you take retail sites that people are emotionally involved with and then add social networking on to it. eBay is obviously the best example of that. In addition, Amazon with their various wish lists and lists features, as well as the recent addition of discussion forums, has made a significant impact on how much time people spend on Amazon. It is the same as with a bricks and mortar retailer, like a Barnes & Noble (BKS), the more time you spend on the premises, the more likely you are to give them revenue one way or another. I think that the other way, trying to make social networking Sites more retailing, is fraught with many more difficulties, and I think that ad sales will continue to be the primary revenue source on a purely social networking side.
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