Next Great Thing

Yesterday, Hearst announced it is acquiring Kaboodle, a social shopping service that draws more than 2 million uniques monthly and 250,000 registered users. The site allows users to organize their personal shopping research by “tagging” products on sites and then rate and review saved items. More recently, it has added SNS elements by allowing users to build personal profiles and create groups centered on common interests. From the WSJ:

Hearst says it is likely to build pages on Kaboodle featuring products from many of its 19 U.S. magazine titles, such as Cosmopolitan and Good Housekeeping, aiming to generate buzz around the magazines by allowing shoppers to sound off about the products they feature online. It wants to develop Kaboodle into a larger independent lifestyle site by linking it with deep-pocketed advertisers and more editorial content.

Hearst created its digital unit, Hearst Digital Media, in March 2006, and this latest buy fulfills one of the group’s major goals of building a presence in the social media space. They bought into the online teen market in January with the acquisition of the eCrush.com networks of sites (eCrush.com, eSpin.com, LookUpHookUp.com, TruthQuiz.com and HighSchoolStyleBoard.com). Indeed, by taking its brands back in-house and making digital outreach a priority, Hearst is on the right track.

This was smart move by Heart for another reason: Social Shopping is a hot property. Indeed, shopping fits with social media like Kate Moss in a pair of size 0 skinny jeans. Why?

• Young people love to tell their friends about things they like and get recommendations in turn. This is all facilitated by social networking sites (SNS). According to Deloitte’s “2007 State of the Media Democracy” survey, when 18-24 year-olds find a TV show or website that they enjoy, they tell an average of 18 people (compared with 10 for all age groups). Word of mouth (WOM) is the most common reason for Millennials to visit a website, even more than advertisements.

• Tack onto the female nature to go shopping for fashion items in pairs, if not packs. A girl needs advice, opinions, and to know if her butt looks big in this.

• eCommerce has exploded in recent years. After speeding past the $100-billion mark just four years ago, online sales topped $200 billion in 2006. The ease with which one can click and buy beats out the lines and crowds at the mall any day. Quick payment services like PayPal, improved customer service, and online promotions have all contributed to the boom.

These social commerce sites are driven by “internetworking” and could become crowd cloud leaders. Social shopping is also the next frontier for marketers as it is can be easily monetized. Some are even trying out revenue-sharing models that split profits with users. Here are some of our favorite sites:

Yahoo! Shoposphere: Pick Lists let you share products on the Shoposphere, throughout Yahoo! Shopping, by email, and even through RSS feeds. They have plans to add revenue sharing and blog buttons in the near future.

Crowdstorm: Recommend products and write comments about them, and the best items bubble up to the top.

Wists.com: Especially for discovering and promoting small retailers and young designers, the site lets you publish or share lists of recommendations and wishlists.

ThisNext.com: A “shopcasting network” where you can recommend, share and discover products. Shopcast lists and picks are tagged and searchable on the site.

MyPickList.com: Integrates a user profile and your favorite product recommendations into a portable widget (a PickList) which can be embedded on your SNS or blog.

MyFavoriteThingz : Just like MyPickList but with a revenue-sharing model that lets you earn commission when people buy what you recommend.

Zlio: An all-in-one site that lets you display products you like on both a personal page and a widget. They key element is revenue sharing: you are paid whenever someone buys a product on your Zlio page (Skype and MSN Messenger are popular recommendations.)

Stylehive.com : Build a part of the “hive” by tagging, rating and reviewing products or just see what others are saying.

StyleFeeder.com: Recommendation software matches you against other users to find you products from the web based on your interests and style (complete with Facebook app)

MyShopping: This Facebook application (sans actual site) allows you to harness your ultimate existing network—your facebook friends—and do your shopping from within the interface. Search, rate, ask opinions, make wishlists, and buy products. Soon you will be able to earn cash when people take your suggestions in their own shopping activities.