Swamynathan, G., Wilson, C., Boe, B., Almeroth, K., and Zhao, B. Y. Do social networks improve e-commerce? : a study on social marketplaces. In WOSP ’08: Proceedings of the first workshop on Online social networks (New York, NY, USA, 2008), ACM, pp. 1–6. [URL]

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This paper aimed at answering a simple question: “do social networks improve e-Commerce”? Given the rapid growth of online social networks, the authors were interested in understanding whether transactions conducted between friends could have any quantitative difference with transactions conducted with strangers.

To study the convergence of social networks and e-Commerce the authors took a representative web site, namely Overstock Auctions, where users have the possibility to create both networks with their friends and with business partners. One of the running hypothesis that the authors had was that users could trust more a partner in their social network than a complete stranger and therefore conduct more transactions inside their networks than outside.

The authors found that while the majority of users do not engage in social networking, those who transact with friends generally obtain significantly benefits in the form of higher user satisfaction. The authors conclude that with sufficient adoption social networking can have a dramatic positive impact on online marketplaces.