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We talk a lot about social media marketing – using social networks like Facebook and Twitter to market brands and drive traffic to sites. There is no question that these can be effective tools for doing both of these things.

As time goes on, it may become helpful or perhaps even necessary to use these tools for actual e-commerce. The common thinking behind social media marketing is that you don’t want to be too sales-pitchy in your conversations, and in some ways that is still very true. However, while social media is largely about conversations, it’s not only about conversations.

As time progresses, social media becomes a lot of things to a lot of people. We’ve reached the point where social networks are simply "where we hang out" online. People are not only having conversations. They’re sharing pictures. They’re playing games. They’re looking for information. They’re using social networks to help them make purchase decisions. Sometimes this is through conversation. Sometimes it’s as simple as being a fan of a brand’s Facebook page and receiving timely updates.

Has social media ever led you to an online purchase? Tell us about it.

Facebook has virtual currency, and is starting to open up possibilities for transactions for physical goods. Facebook Connect has just been made easier for webmasters to implement on their sites. That’s huge. As people spend much of their time on Facebook, they are pretty much relinquishing a certain amount of trust to the social network, whether they realize it or not (and whether they should be or not, but that’s another issue).

If your site is plugged into Facebook via Facebook Connect, and they can log in to your site to make purchases just by being logged into Facebook, they may not find themselves as concerned with security issues. Security concerns have long hindered the true potential of e-commerce, and as a result, plenty of trustworthy e-commerce sites have likely missed out on tons of sales, just because of the distrust of the method of purchasing in general.

Now I’m not saying that Facebook Connect is a sign of security. In fact, some might even suggest that it damages security, simply based on the fact that Facebook is often associated with security issues. I’m just saying, users are always signed in to Facebook anyway, and if they see your site is connected with Facebook, they may have no problems signing in with their Facebook info.

"Facebook Connect would allow you to go to a Website like Dell.com and authenticate yourself using your Facebook profile, allow your identity to be known and access your friends so you could spark up a chat," says Paul Dunay, Global Managing Dir. of Services, Social Marketing with Avaya in an interview with eMarketer. "So I could say, ‘Hey, Jeff, I’m looking at this new fancy laptop or this netbook. I heard you bought something. Would you recommend this to me?’

"So you could almost take your friends shopping with you. That is the potential with this example," he adds. "We’re in a period now where we’re all starting to get comfortable with Twitter and get comfortable with using Facebook and LinkedIn and a lot of these other tools, and now we’re about to expand." 

You want to stay relevant in real-time searches to stay current in people’s minds as well. It’s simple branding. That doesn’t mean you have to send out excessive tweets promoting your product. It is information that Twitterers often seek, and by simply discussing information, you’re brand is still visible, even if that information isn’t directly related to your brand. Read this for ways to optimize for real-time search.

Also be sure to watch this video where Sheila Dahlgren of Adobe gives some predictions for the e-commerce industry, which include behavioral targeting and personalization tactics.

What role do you think social media will play in e-commerce in the future? Share your thoughts.

Facebook is still growing. They’re now at 300 million members—you know, roughly the population of the US. But unlike the US, Facebook has also entered the world of “free cash flow positive.”

In his post announcing the milestones, CEO Mark Zuckerberg says that they’d hoped to reach cash positive sometime next year—but, happily, they made enough to cover their operating expenses starting last quarter.

It’s been a while since we’ve heard financial news from Facebook—and the last reports weren’t so good. Almost a year ago, many were speculating whether Facebook was headed for financial ruin, and their ad rates had fallen. And less than six months ago, there were some reports that Facebook was snubbing a $4B valuation despite needing the cash the sale would have given them. (A far cry from $15B, eh?)

Up to this point, it seemed that Facebook was struggling to monetize itself enough to cover its costs. But according to Zuckerberg, their finances are better than fine. One recent effort that may have helped (but, let’s be honest, is so new that it probably hasn’t made a whole lot of money yet) was opening the gift shop to developers. Inside Facebook notes a few other potentially contributing efforts:

What’s driving Facebook’s revenue growth? A combination of revenue streams: Facebook’s self-service ad business has been very strong lately, it continues to invest heavily in brand advertising efforts, and it also continues to release many experimental expansions to its virtual goods and virtual currency business, Facebook Credits. The company is also still deriving revenue from its advertising deal with Microsoft, signed when Microsoft invested in Facebook in 2007.

If Facebook is a microcosm of the Internet, and they make money off serving ads that lead to other parts of their site (driving up time onsite and possible ad rates), perhaps this is a good sign for the Internet at large.

What do you think? Is Facebook’s cash positive status a sign of a turn around? Or are clever new monetization strategies keeping Facebook ahead of the curve?

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Facebook is set to begin testing an expansion of its Gift Shop, for third-party developers to begin selling items to users for Facebook’s virtual currency. The really interesting part about this is that these developers can sell physical merchandise, not just Facebook gifts.

The web has been waiting for this concept to come. Earlier this year, Facebook was rumored to begin testing a payments system that would compete with entities like PayPal and Google Checkout. Then they hired none other than Prashant Fuloria, former Director of Product Management for Google Checkout. Inside Facebook’s Justin Smith reports:

Here’s how it will work: gifts created by developers will be integrated into the Facebook Gift Shop alongside regular Facebook virtual gifts, marked with the developer’s logo or icon. In the case of virtual gifts, the price will usually be 10 Facebook Credits or USD $1, the same price as most virtual gifts created by Facebook. However, physical gifts – for instance, say a dozen roses – might cost up to 500 Facebook Credits, or USD $50. When users select a physical gift, they’ll be prompted to enter the delivery address in line, just like in a traditional shopping cart experience.

All signs point to this leading to a much larger eCommerce phenomenon. Facebook just may corner the market on gift giving in the not too distant future, not to mention just item buying. Facebook apps are going to start looking a lot more appealing to online retailers. Consider the portability of Facebook in products like Facebook Connect, the fan box, etc. Something tells me we’re going to see a lot of Facebook shopping.

I can see it now: "Checkout on Facebook – You’re already logged in."

A lot of web users are already spending an absurd amount of time on Facebook. The ability to shop from Facebook is going to make the time spent with the social network increase that much more. Add to the mix, Facebook’s extremely targeted brand of advertising that serves ads based on user profile information. Things are going to get really interesting on Facebook.

Facebook’s new changes went live last night for some users. It remains to be seen when they will be available to all.