Do your friends really know what you like?
December 1, 2007
The rise of social networks and the promise of monetization is driven by the belief that recommendations hold significant value.
There are numerous studies that show “Word of Mouth” as the leading source of influence on a person’s purchase decision. However, WOM has become something of a general term to describe general conversations that people pick up from a wide variety of sources. Social networks like My Space and Facebook are hoping to make money based on the recommendations of “friends” to “friends”.
Interestingly, a paper published in 2006 by Andrew Gershoff and Gita Johar at Columbia, suggests that we tend to over-estimate the knowledge and understanding our close friends have about us, when in reality, their recommedations are no better than others who aren’t as close.
However, the sharing of ideas and recommendations, even if their recommendations aren’t great, the process plays a crucial role in strengthening the bond between friends. We still want to recommend and be recommended things, because that’s one of the ways we become closer to others.
However, Facebook, Amazon and MySpace know far more about us than our friends ever will.
Perhaps the “secret sauce” and the “tricky territory” will be for these players to help our friends to know us better and therefore increase the likelehood of succesfull recommendation, leading to a win-win situation.
Toolsets and applications that help friends better understand the taste of their friends could play a significant role in helping to monetize these social networks.
Although this is the role of many of the current applications on Facebook that determine taste and interest, there are too many of them and there’s no way to aggregate the information and build interesting friend profiles, perhaps that will come.
Posted by Ed CottonNext post Previous post
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