• by Laurie Sullivan  @lauriesullivan, October 4, 2010

Selling products through social networks isn't entirely new, but when the most powerful online ecommerce store -- Amazon -- launched a Facebook product page last week to sell diapers for Procter & Gamble without making the consumer leave the site, analysts stood up and took notice.

Facebook could become a major source of referral traffic for ecommerce, just as the site became a dominant source of traffic referral for online content, according to Lazard Capital Markets Analyst Colin Sebastian. "We view the integration of Amazon webstores on Facebook as adding a meaningful new source of leads at essentially no cost; however, over time we would expect Facebook to levy a referral fee similar to the fee now charged on the sale of virtual items," he wrote in a research note published Monday.

Sebastian views the deal as another signal that Facebook will become a more visible force in ecommerce. He cited unnamed industry contacts as pegging Facebook's revenue this year at about $2 billion, driven, in part by advertising and virtual item sales.

The ecommerce opportunity could catapult Facebook's revenue higher through the "shop now" tab on the Fan page, rather than a "shop" tab that consumers might find on Fan pages from 1-800-Flowers.com. The Pampers webstore owned and operated by Amazon.com means consumers will not need to leave Facebook to buy Pampers products. Consumers use their existing Amazon account during checkout to order products, although still on the Pampers page.

Aside from ecommerce, other possible revenue generators for Facebook include game credits, third-party ecommerce sites, local coupons, brand advertising, and search ads.

Matt Lawson, Marin VP of marketing, says merging ecommerce, search and social on Facebook will become more important, whether through a custom page or ads. Consumers who remain in Facebook are more likely to complete a purchase compared with those who leave, he says. "It drives people to 'like' the brand and increases the value of the earned media that advertisers get from their dollars spent," he says, suggesting that Amazon's deal confirms the experience produces better sales and marketing results.

Getting the Facebook member to "like" or "fan" the page allows brands to send the consumer messages. One of the easiest ways to do that is through Facebook paid advertising. The more brands that build ecommerce sites on Facebook, the more they will tap into paid advertising to promote the brand. Lawson says it's a circular cycle that works not only for the brand, but Facebook, too -- keyword selection, bidding and copyrighting search ads, all part of the advertising process on Facebook to optimize ads.

Lawson recommends focusing on image testing rather than copy. The image becomes more important in the visual world of social to drive consumers to the brand.