Social Networks Have Little Influence on What You Buy Online

Google is very worried about the growth of Facebook, and with good reason. The company has been playing catch-up when it comes to the social Web. Case in point: Google Buzz. At launch it caused a privacy outcry that led to a class action complaint, which was settled when Google agreed to pay $8.5 million to make it go away. But it would have been a dud even if it didn’t cause privacy problems. Instead of transforming Gmail into a social communications hub linking to Twitter, Facebook, and other social networking sites, Buzz tried to replace them — not good. Its latest foray into the space that was unveiled last week, “+1“, has also failed to impress.

But the results of a new Goldman Sachs survey should give the company some short-lived peace of mind. The study’s results show that social sites are not very influential when it comes to online shopping decisions — search engines and recommendation engines carry much more weight. So Google will maintain its dominance when it comes to advertising earnings as long as it continues to hold the upper hand in impacting consumer shopping habits — advertisers obviously want to be where they can influence purchase decisions, and they will keep promoting their goods and services on Google as long as they get good results.

In a previous post, I cited some research by Webtrends and Adgregate Markets that showed Facebook stores now have the same sales conversion rates as e-commerce websites. Facebook is capable of becoming an e-commerce giant in the not too distant future, surpassing Google in terms of online shopping influence. Google should be really worried.

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