FreshNetworks have an interesting Infographic on the rise of Facebook commerce. Unsurprisingly, people are finding that personal recommendations lead to higher purchase rates and that the numbers for purchases made via Facebook are on an upwards trend.
A few years ago I had an idea about how to take advantage of these behaviours, which I still haven't seen anyone attempt in quite the same way - rewarding recommendations, but doing so in a way that encourages targeted recommendations...
At the moment, through things like affiliated links, etc. I can post links to Amazon and other sites on my blog and as such I am "recommending" products. On other sites, such as TripAdvisor, I can leave general recommendations for places and products I've been to and used. People who trust me can use these links and if they do, I earn money (this has never actually happened to me btw - I'm talking theory here!).
There are other services out there that encourage the sharing of links to products and work like a kind of pyramid scheme. The more people you share with, the more likelihood you have of someone buying and you get a cut of that from the vendor. The problem is that this encourages spammy behaviour, which decreases the value of these recommendations and makes it more likely that people will click-thru, destroying the usefulness of the system.
In my mind, the reward to the user making the recommendation needs to be tied to the percentage of people who buy, not the number. So if you send a link to the new Matt Nathanson album to 10 people and one person buys, you get significantly less reward than if you only send to one person and they buy. It forces the recommender to really consider who will actually like/want a product. This makes the recommendations far more valuable to the vendor as well as the person receiving the recommendation. Everyone wins!
Until someone cracks this recommendation problem, we're probably not going to see the full value of social networks in e-commerce. Which is why I like the way Google is moving with Circles. They are trying to encourage more sharing, while also making it more relevant to the people receiving the links. If that really takes off (and I personally think it will) then it will naturally expand into e-commerce.
So that's going to be G-Commerce then....? ;-)