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Sites in Like, Not Love, With Facebook Link

Source: WSJ

Posted on 03 Aug 10

Facebook Inc. is finding new kinds of websites to "Like," in the parlance of the popular social-networking service. But some of the sites are trying to figure out if the admiration is mutual. Since April, the company has been trying to persuade sites to add a free "Like" button, which lets Web users show their interest in a page with one click and notify their Facebook friends about it.

As of July, 350,000 websites, most of them news, sports and publishing sites, had added what Facebook calls "social plug-ins"—of which the "Like" button is the most prominent example.

In recent weeks, a growing array of shopping sites have placed "Like" buttons on their pages, too, including those of eBay Inc., Best Buy Inc. and Gilt Groupe Inc., expanding Facebook's influence into a $140 billion industry in the U.S. that drives both online advertising and a growing portion of retail sales.

For e-commerce sites, adding a "Like" button lets shoppers quickly share a product or deal with their Facebook connections, potentially encouraging them to buy the product themselves.

"Customers are looking to other friends in their social network to figure out what product is right to buy," said Tracy Benson, senior director of mobility customer solutions at Best Buy.

Users must be logged in to Facebook for the "Like" button to function. When a user clicks the button, that fact shows up on their Facebook profile, and may also show up in the "News Feeds" of his or her Facebook friends. (Facebook says its computers use formulas to determine which information is shared with a user's friends.)

The website that hosts the button can see how many people have clicked "Like" but receives only anonymous, aggregate demographic data from Facebook about the sort of people who clicked it. For Facebook, the "Like" button gives the company insight into what people do on other sites and helps it better target ads on its own site to users' interests.

The company says "Like" is catching on because it is technically easy for e-commerce sites, which haven't focused much on the connections among customers, to add a networking feature. "The only investment is where you want to put it on the page," said Bret Taylor, Facebook's chief technology officer.

E-commerce and media sites say the Like button increases their visits from Facebook fans, making it an alternative to Google Inc.'s search engine as a source of free traffic.

Quantifying that boost is tough, but Facebook says sites implementing social plug-ins see a one- to five-fold increase in referral traffic from Facebook. Moreover, the people who click "Like" tend to have more influence, with an average 185 friends, compared to the average 130, the company says.

Daniel Mandell, a director of business development at Wenner Media, the owner of Us Magazine, said the celebrity website soon will roll out the Facebook "Like" button after years of allowing its visitors to share content on Facebook through other sharing buttons.

Visitors from Facebook are valuable because they "are an extremely engaged audience," spending an average of three minutes on the US site, about 20% higher than visitors from search engines, he said. For shopping sites, though, the key measure of success is sales, not traffic. After Gilt introduced "Like" onto its "flash sales" pages at the end of June, the site saw a 50% leap in sales coming from Facebook after the first week. "We are watching to see if it continues, beyond an initial bump because it is new," said Jag Bath, the company's vice president of product management.

"Everyone is hoping that the endorsement of a 'Like' button will be the thing that gets consumers from browsing to actually buying," said Fiona Dias, executive vice president of strategy and marketing at GSI Commerce Inc., which runs about 100 retail websites. But among her clients who have implemented "Like," there has been no direct correlation between top-selling and most-"Liked" items.

Some shopping sites say integrating "Like"—which leaves their own server computers reliant in part on Facebook's—has slowed their sites. Facebook says it quickly fixed a bug in the system when it launched it in April and has continued to improve server-response times.

Since the "Like" feature effectively creates a direct connection between Facebook and the user, it impedes a site owner from collecting data on users' sharing habits.

That is a change from when users share content through sharing buttons developed by other companies. Those companies, including ShareThis, which has buttons on 800,000 websites, can collect data to help sites understand their audience.

If online publishers lose data about user behavior, it could deprive them of revenue from selling advertising that is targeted to particular users, said Tim Schigel, chief executive of ShareThis. Advertisers are increasing their spending on such targeted ads faster than that for traditional ads that appear across an entire website at a given time, no matter who is visiting.

Knowing which customers share website information is valuable because it lets publishers see which users are influential, meaning they drive a lot of traffic back to their sites. "To the extent that any third party comes in and knows more and can extract more value than the publishers themselves, they can be worried," Mr. Schigel said.

With "Like," retailers are also unable to directly message customers who indicate interest in products, although they can post general messages about their products that might appear on the users' Facebook home page.

Facebook stumbled early on with programs, including one called Beacon, which shared information about what consumers did on other sites, and has lately been under pressure from users and regulators to boost privacy. Mr. Taylor said the company is sensitive to protecting users' data.

For Wenner's Mr. Mandell, the benefits of the "Like" button outweigh the lack of user data. "In the future we hope to have the ability to capture more data," but "in the interim we will continue to provide our users with tools to consume and share our content in the way they want to."