Online vendor Buy.com is buying into the social networking trend — literally. The privately-held Web merchant has closed on the purchase of Metails.com, a free Web site that hands out rewards to members who persuade their friends to buy products they’ve enjoyed.
Terms of the sale, for cash and private equity, were not disclosed.
Founded in January 2004, Metails.com allows registered members to build an online profile of their interests, likes and dislikes, as well as products they have used and approved. Some of those shared interests can be as intangible as loyalty to the Pittsburgh Penguins hockey team or to a Web site for voter information; but the service is also heavy on product information and endorsement from its members on everything from bicycles to the latest Green Day album.
The Metails site lets others read these endorsements, join a social network based on those interests, and buy and try the products named through partner retail sites. Members can gift certificates or product discounts if their social network partners give them credit for the referral.
“The connection between social networking and online commerce is a natural fit for Buy.com,” said Neel Grover, president, Buy.com, in a statement. “The effect of like-minded consumers sharing product information and being able to act on that information in one destination is explosive.”
Online social networks have shown exponential growth over the last year among the highly desirable teen and young adult demographics. The largest — Friendster and Meetup.com — have also attracted interest and investment from some Internet celebrities associated with Web search or auction sites. Friendster’s board of directors includes Yahoo co-founder and former CEO Tim Koogle and former PayPal CEO Peter Thiel.
Meetup.com got an undisclosed investment from eBay founder Pierre Omidyar last November; Omidyar serves on the Meetup board. In January 2004, Google launched Orkut, a “trusted” social network in which members invite their friends to participate.
Buy.com is not the first Web vendor to emphasize the merchandising potential of these networking functions. Last September, liquidation retailed Overstock.com announced that it was adding a social networking tool to its auction site. The network lets Overstock participants consult social and business contact to determine the reputations of buyers and sellers.
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