Online Social Networks and E-Commerce - MIT Computer Science ...

Clarence Lee and Shirley Fung
data such as search query terms and browsing history to better improve the price point and also product
selection of the store.
Online advertisers such as DoubleClick have already started using the data to better target advertisement
to increase sale of its clients. Amazon.com is one of the first online merchants to improve their advertising
strategy by the use of collaborative filtering. Using the purchase history of the customers, Amazon.com
shows suggestions for other products by the relation that others who have bought x also bought y.
Amazon started its e-commerce business as an online bookstore, and has grown to be a store that sells
items ranging from A to Z (as represented by its logo). Amazon also operates other online stores for
retailers such as Target and Marks & Spencer.
Traditionally, consumers have ways to shop without being tracked by visiting the physical store, and pay
for their purchases with cash. With theses online retailers however, there is no longer an option to shop
with privacy. Consumers are required to use a credit card for online transactions, and every click on the
Web site (similar to every move you make in a store) is monitored and tracked. This raises some questions
about how privacy should be protected in this new setting.
Joint Services and Advantages for Marketers
For marketers, having information from one Web site isn’t enough in the increasingly competitive world
of e-commerce. Now, companies are interested in knowing what consumers do on Web sites besides their
own. For instance, if Amazon knows what the consumer has listed as his/her favorite books and music
artists on Facebook, it can better advertise for similar books and CDs on the consumer’s next visit to
Amazon.com. Another example, if Amazon knows when your birthday is and who your friends are,
Amazon can use that information to advertise gifts ideas to your network of friends.
In these scenarios, some consumers find it intrusive that these businesses can know so much about them.
Alternatively, when they visit one Web site, should they expect the information to stay within the
company, and should never be passed on or sold to another party? There are currently no policies that
would protect against these types of situations.
Businesses now value all this information greatly, and are very interested in using it to improve their
understanding of individual consumers. In order to make it easier to aggregate data streams, companies
have started to provide platforms for integration. Both externally and internally, these companies began
to diversify the kinds of services they provide on their Web site using these platforms. In November 2007,
Facebook announced a new service called Facebook Beacon. The service allows a user to announce to
others in their network about products or services he/she likes. Many online merchants have already
signed on as a partner site through Facebook Beacon. Using Facebook Beacon, the users can endorse
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