First, Some Background

Amazon is the number one Internet retailer on the Web, pulling in roughly $24.5 billion in 2009, or about 19.4% of all sales generated by the top 500 Internet retailers.  It is the seventh most trafficked site on the Web, with about 73 million monthly visitors and over 540 million monthly visits.

With nearly 23% of users’ time spent on social networking in 2010, it is now the number one activity on the Web – more than double the next most popular activity, Online Games.  Facebook is by-far the largest social network with over 500 million registered users – more than double the next most popular network, Qzone, based in China.  Facebook is also, logically, the second most trafficked site on the Web, with over 130 million monthly visitors.

What Happened

In July, Amazon integrated with Facebook Connect – which essentially allows third-party sites to utilize Facebook features and functions with the user’s authorization – in a more sophisticated way than most other sites had done previously, and thus, opening up the ecommerce giant to the 500 million-user social graph.

When a user connects their Amazon account to their Facebook account, it comes with a number of notifications, starting with “You can disconnect at any time.”

A light-box then pops up and lists out the benefits of connecting your two accounts and the following assurances:

• Amazon will not share Your Account information with Facebook.
• Amazon will not share your purchase history with Facebook.
• Amazon will not attempt to contact your friends on Facebook.

Due to Facebook’s parade of privacy snafus, these warnings are a ‘must’ to have any hope of adoption.  It is important to note that Facebook will not gain any account information or purchase history from Amazon.  This means that a user can disconnect at any point, and be assured that this data will remain with Amazon.

After you authorize the connection, you are taken to Your Amazon Facebook Page, on which you’ll find all of your Facebook interests listed under your Facebook profile picture on the left sidebar.

In the body of the page, we’ll find (from top to bottom):

• Birthday and Gift Suggestions for Your Friends on Facebook
  • Show you upcoming friends with birthdays
  • Recommends gifts based on items they “like” on Facebook
  • Popular Among Your Friends on Facebook
    • Shows you items that your friends “like” on Facebook
  • Recommendations Based on Your Favorite Books on Facebook
    • Items that are mapped on Amazon to those that you “like” on Facebook
  • Recommendations Based on Your Favorite Music on Facebook
    • Items that are mapped on Amazon to those that you “like” on Facebook
  • Recommendations Based on Your Favorite Movies on Facebook
    • Items that are mapped on Amazon to those that you “like” on Facebook

Under each recommendation, you can click “Why is this recommended?” which will open a pop-up window that shows you the related item that Amazon found in your Facebook profile:

Now that these two masters of their respective domains on the Web – Amazon and revenue, Facebook and time-on-site – have integrated, we can expect that referring traffic flowing between the two sites will increase.  By serving products that are more relevant to the visitor’s social graph, Amazon could expect an increase in revenue, average order value, and time-on-site, among other metrics.  Facebook, on the other hand, will be able to paint a picture of how important a user’s social graph is to their purchasing behavior, securing both more businesses developing their presence on the social network, and businesses investing more heavily in Facebook Paid Placement.

What Does It Mean To You

For online retailers, the opportunities are great, and the risk is small.  Amazon has incorporated Facebook Connect at a more integrated level than other sites have in the past, and if users are spending more money and time shopping on Amazon, the case will be made.  Every ecommerce site should look into incorporating some recommendation system into their catalog based on the visitor’s social graph.  Levi’s chose to do it by putting “like” buttons on every product in their webstore and letting the veritable cream rise to the top in their Friend Store.  Shoppers trust reviews from friends, family, and others in their social circles far more than they trust advertisements, so it makes sense to make their social circle’s interests as transparent as possible.

Had you heard of the Amazon-Facebook Integration? If so, are you going to connect your two accounts? Let us know in the comments!

Tags: amazon, ecommerce, facebook, facebook connect

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