Is the lack of an integrated social network and reputation management system the Achilles heel of the eBay juggernaut? Overstock.com seems to think so. On Friday, Overstock.com launched a new auction site code-named "Ocean" that is "powered by social networking" and is aimed squarely at eBay.
"We sought a way to integrate the trust inherent in these networks into e-commerce. To achieve this, we have integrated into our auction tab a system that allows for social and business networking unlike any that has ever connected businesses and consumers on-line. It may evolve into a massive, intelligent marketing organism, or into a system of personal introductions, or in some direction we have not foreseen. One thing we do anticipate, however, is that these "reputation networks" will work particularly well for on-line auctions, where buyers, sellers, enthusiasts and experts are traditionally anonymous -- and opinions are often biased (as evident in the declining value of ratings and the increasing tendency for retaliatory and spiteful ratings). - Patrick Byrne, President, Overstock.com
A quick perusal of the system yielded a number of pros and cons. Overstock's president seems to strongly feel that there is significant value in providing this "friendly" (their word) connection between users of the network. And anything that brings rational, personal interaction between buyers and sellers is a good thing in my book. That's where real relationships come from.
Byrne also clearly recognizes that trust and "reputation networks" are important in building a business and a community. He also is willing to take a risk in this 'ready, fire, aim" approach...he seems to know that there is *something* there in providing these connections, even if the hard benefits of community-building are not clearly defined. On the other hand, getting "into" the network is a bit of a hassle. Multiple registrations are required (one for Overstock, and then a separate one for the auction and social network).
In aggregate, I view this with guarded skepticism. First off is the increasing issue of "social network spam," where individuals with even the weakest ties to a person are innundated with "requests to join my network." Additionally, while the fundamental idea is sound, it will likely be difficult for Byrne to build critical mass in this network for the casual buyer/seller. That being said, those individuals who are very deep into a community, however (such as memorabilia collectors), may embrace this to find other individuals who have similar interests and passions.
Of course, the biggest confusion will be the question of "why?" For the average buyer and seller, what will be the benefits to them of investing the time needed to create, grow and nurture their network?