Interesting themes in a press release from the president of Overstock.com, who has built a social networking reputation system into the company's online service:

Patrick Byrne

[from 'It's Up' - Overstock.com Launches Auctions Powered by Social Networking press release]

The liquidation industry is one not normally known for its high-minded ethics: from our start in late 1999 we set out to distinguish ourselves by a fanatic devotion to fair dealing. I believe our liquidation business survived the dot-com crash largely due to our reputation among people selling to and buying from us. Even when we had no money to advertise, word-of-mouth convinced people to try our site, and the way we treated them kept them coming back.

Coincidentally, this has been the missing piece in e-commerce: in the deafening cacophony of e-commerce, whom can people trust? Most people would say, above all others, they trust the opinions of friends, family, and perhaps even a few co-workers. They rely upon social networks to help make connections and guide decisions. We do this in business as well, making deals based on relationships forged through our own experience and the experience of those we already trust.

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).

The emergence of purposeful network-based solutions like Overstock.com's follows a prediction I made earlier this year, when I said that standalone social networking solutions feel like an empty office building with people wandering around in them, and they will fail unless they turn to doing something tangible and vertically focused, like MySpace is doing with the music business (note the recent announcement that R.E.M. would be releasing their new album there, before more conventional distribution). There's a lot of bumping into people but very little work being done.

We should anticipate that all successful online emporia of the not-too-distant future -- wheather travel sites, shoes stores, or music services -- will be instrumented with full-up social networking underpinnings. Out entire online experience will be "socialized" in this way, and the race is on to see who will provide the social networking network that will underlie this new world order.