Matt Marshall at VentureBeat ponders the future of social shopping by comparing Like.com (portfolio company) with ThisNext. Matt's conclusion is that
comparing ThisNext with Like.com seems premature. Has Like.com really
killed social search? Yes, probably, in the short term, if youâre only
looking at the numbers. But social shopping search and shopping
technology is still in its infancy, and we haven't given it a chance.
Online retailing is - conceptually - very simple. You're either very early, smart and big, like Amazon.com, and have a brand and a destination that people just remember to visit. Or you buy traffic from search engines, either horizontal ones like Google or vertically focused ones like Shopping.com and Like.com. Actually even Amazon buys a lot of its traffic, because people are conditioned to use a search box as the starting point for any web activity.
Shopping search engines have worked well for hard goods, with buyers driven by price and selection; Like.com is transforming shopping search for soft goods, where appearance and taste matter more - you won't buy that ugly shirt even if it's half off, will you? The benefit of Like's visual search technology is reflected in better search results, implying more satisfied users who buy more. Technically very challenging, conceptually very simple, and financially very rewarding.
Social shopping sites like ThisNext and Stylehive are looking at offline discourse about products - the window-shopping stroll through the mall with your friends, the conversation about dress styles by the water cooler - and trying to take it online. This cuts search engines out of the picture, because you will presumably stumble across products in the course of your online life, most of which is not lived in search engine. I really hope this strategy works, just as I root for any strategy that relaxes the current strangle-hold that search engines have on monetization on the Internet.
But there are two huge challenges to be overcome by the social shopping sites Search engines monetize fantastically well because they capture intent and get paid at the point of capture; user intent is missing in social shopping, which means that user attention and user dollars might be missing as well.
The second challenge for social shopping is that users spend most of their online time on social networks, which also have a monetization problem to solve. If Facebook owns your eyeballs, your social graph and its tastes, won't it become the ultimate social shopping site? Beacon is a step in that direction, after all.
Matt's article ignited quite a controversy, and not just about social shopping. Fred Wilson used it as the centerpiece of an article attacking the journalistic standards of pro bloggers, so of course Techcrunch had to defend its tribe of journabloggers and attack Fred. Here's a juicy bit from Mike Arrington:
That’s no apology, Fred. An apology would include you admitting that
both posts were well researched and well written pieces. And that it
was wrong to attack the reputation of these writers just because the
conclusions reached by them were different than your own.
I expect we haven't seen the last of this Munjal Shah, CEO of Like.com, adds his two cents, staying clear of issues of journalistic ethics and staying focused on the numbers of his business.
