Is Social Shopping the Next Big Thing? Venture Capitalists Think So.

Caroline McCarthy has posted a couple articles over the past week about a number of social shopping sites that have raised new rounds of funding. As McCarthy wrote, StyleFeeder raised $2 million and then today ThisNext raised $5 million in a second round of financing from Anthem Venture Partners and Clearstone Venture Partners. This news emphasizes the increasing popularity of social shopping with venture capitalists and rising expectations of a future social shopping boom.

We have previously covered at least two social shopping sites and a search in Google for “social shopping” yields a wide array of competing sites vying for a piece of the pie. I would argue that most of these sites are going to crash and burn because they are missing one key component: sizable communities. A few of the sites, including ThisNext have attracted a relatively large audience but I would argue that they aren’t large enough to compete with the mainstream social networks that will eventually enter the social shopping space.

Facebook has clearly stated their intent to get involved with the social shopping market by providing developers access to their existing payment system: wallet. Once Facebook extends their payment system API to developers we are going to witness a massive spike in social shopping activity. Ultimately Facebook Beacon was the beginning of the site’s push to conquer the social shopping space which unfortunately for Facebook, resulted in a P.R. disaster rather than a technological revolution.

Over the next 12 to 24 months I would expect competition to heat up in this space as Facebook (and eventually MySpace and other social networks) begin to open their platforms and integrate e-commerce features. Do you think social shopping is the next big thing? Do you even know what social shopping is?