eBay jumps into social networking

Despite the surge in Facebook and MySpace, eBay (NASDAQ: EBAY) has been mostly on the sidelines with social networking.

But that's changing. The auction powerhouse is now jumping on the bandwagon with a social network called "Neighborhoods." Basically, it allows you to form groups where you can share photos, reviews, comments and so on.

To get some perspective on things, I had a chance to talk to Robb Hecht, who is a social networking expert and the operator of MEDIA 2.0. According to him, "The Starbuck's (NASDAQ: SBUX) of online shopping? That could just be what online consumers call eBay's new social commerce experience.

"By adding Web 2.0 engagement features like consumer tips, responses, photos and product reviews, eBay opens up its brand. It also shows how Web 2.0 is so much more than mere 'tools' added to websites; rather, Web 2.0 changes entire business models and organizational philosophies. eBay's new Neighborhoods 'nichify' the online shopping experience -- bringing like minds together, building a sense of camaraderie and community around the previous solitary online shopping activity. It is clear eBay is trying to create an addicting open commerce engagement platform it hopes buyers and sellers will park in and never want to leave."

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates DealProfiles.com.