News

Facebook may be overrated

December 26, 2011

Retailers are still waiting for Facebook to payoff, and they may be waiting a long time, according to a story recently published on GulfNews.com.

"The commercial aspect of social media is overhyped and no one's really caught that rabbit yet," Jonathan Johnson, president of Overstock.com, said in the story.

While skeptics say social commerce is a rhetorical fad, advocates say it's just new and a matter of time until someone finds the right combination of technology and attraction to make it work.

However, there is less commerce on Facebook than many people had anticipated just nine months ago, according to Kevin Ryan, chief executive of Gilt Groupe, an online fashion retailer. And recent shopping stats don't show a lot of support for Facebook either. In fact, on Cyber Monday, just 0.56 percent of buyers were referred from social networks, according to IBM.

Facebook itself, which hits the stock market in 2012, shows no interest in being a retailer; it's focused on advertising but has said 88 percent of the top 200 internet retailers are "integrated" with its site and have seen traffic from Facebook increase by an average of 236 percent from the holiday season last year.

Read more about online retailing.