Normally, when companies announce a 40%+ increase in costs and miss analyst expectations, their stock takes a hit. Last week, Amazon was no exception with its stock dipping by 15% immediately after the news, but it has subsequently recovered to $118-$120 where it has been for the last month.

The earnings miss was probably more sensitive this quarter because of the launch of Apple’s iPad. Ever since the iPad launch, Amazon’s stock has been trading 20% lower than its high this year at around the $150 mark—assuming that Amazon’s Kindle reader would be negatively impacted. Amazon did not disclose its Kindle sales but is seeing strong growth for Kindle and Kindle-based ebook purchases. Kindle is becoming to Amazon what iTunes is to Apple.

Long time watchers of Amazon will recall that we’ve seen this before. Amazon is not afraid of short term blips in its stock price, accepting them as a necessary evil when it comes to building a stronger, more competitive business.

Remember the market reaction when they announced free shipping?

Over the long term, Amazon has not disappointed by being focused on doing what’s in the best interests for its business long term. By investing heavily in sales and marketing, free shipping, and tech infrastructure, Amazon is confidently building an ever bigger business. Oh, and don’t forget that Amazon grew by 41 percent year over year in this last quarter, achieving $6.57 billion in revenues.

Amazon also stated that more than $1 billion in sales had been achieved via mobile devices over the last 12 months. That includes book downloads by Kindle and iPad users, of course, so it doesn’t (yet) signal the arrival of mass mobile commerce.

While Amazon hasn’t disclosed what made up its $1 billion of mobile sales, it’s a pretty safe bet that ebooks purchased using Kindle and the free Kindle reader for iPad and PC make up the bulk, and most of these will be repeat purchases.

This also shows the way in which their whole customer philosophy is geared towards repeat purchases. By forcing a full registration before making a first purchase, Amazon is willing to risk marginally fewer sales by not providing a ‘guest checkout’ facility, in return for a streamlined repeat purchase experience. Once a customer is registered, Amazon markets to them extensively using email, and when a customer returns to make their second purchase, it is done with a maximum of only six mouse clicks.

Website visitors follow many different paths before, eventually, a frustratingly small percentage will go on to become customers. These paths are hard to visualize, because they rarely represent linear journeys. Many visitors will visit a website several times before making a purchase, probably looping back and forth between pages in what seems, to the website designer at least, a totally illogical pattern.

When shopping, like many activities in life, people are not logical; they are complex bundles of emotions wrapped up in an outer veneer of calm. For many, shopping is an exquisite pleasure to be relished, drawing perhaps from our primeval hunter-gatherer roots as we savor the chase and secure our purchases, returning triumphant.

While emotion is involved in most purchases, it is just one of the elements that makes website conversion optimization so challenging. Most website design is based on logical principles, hard data, gut feel and analytics.

The analytics summarize and group herd behavior into something intelligible, something measurable and logical. A long way from the emotion of a purchase.

So the challenge of optimizing a website’s conversion rate is not straightforward. Web analytics show only an aggregate level view and little of the individual journeys that customers make to get to the sale, or more frequently, to an abandonment and no sale.

Conversion rate optimization invariably focuses on one element of the conversion mix: SEO, Landing Pages, the shopping cart process, email, or shopping cart recovery. It’s rare indeed that you can look at the problem end to end.

That’s exactly what the Conversion Leaders Summit is all about: We’ve collected an awesome group of conversion experts in one place to debate the problem end to end:

• SEO – SEOmoz.org, SEO specialist, Danny Dover
• Website and Landing Page Optimization – SiteTuners.com, CEO, Tim Ash
• Email Marketing – Silverpop, VP of industry relations, Loren McDonald
• Web Conversion and Shopping Cart Recovery – SeeWhy, founder and chief strategy officer, Charles Nicholls

Each will present in just five minutes their ‘pearls of conversion wisdom,’ and then we’ll debate—live, led by questions from the audience—about how it all fits together. Sounds like a lot of fun! With four big egos on the panel, it promises to be lively—with some fireworks, disagreements, and hopefully at the end, some consensus. Whatever happens, you’re guaranteed to come away entertained, with at least four compelling new ideas about how to maximize your conversion rate, end to end.

So join us, and join in—and participate in the Great Conversion Debate. This is one not to miss; July 27, 2010 at 12:00 p.m. Eastern time; http://bit.ly/aCWrU9

The news that Ben & Jerry’s ice cream will stop sending email to their 1.3M customers is, frankly, remarkable.

What were they thinking? Are they nuts?

Their plan, announced in an email to their subscribers last week, said that they will be discontinuing email—in favor of social media. While there has been some idle speculation about whether social media will replace email, this is frankly nonsense. They are complementary channels, and understanding how to use the two together in a mutually supportive way is the key.

There are three fundamental problems with Ben and Jerry’s decision:

1. Customers choose the channels, not brands

Ben and Jerry’s subscribers opted in to their email program. They chose email as their preferred method of communication to receive news and promotions about the brand. We know from multiple studies that the number one reason for ‘friending a brand’ is to receive special deals and promotions. The same holds true for email.

ExactTarget recently published some interesting new research titled Subscribers, Fans and Followers on how consumers choose to interact with brands. When looking for promotions:

“76% of consumers will initially seek deals and promotions on a brand’s website, and from there, 62% will sign up to receive email, while 54% will use a search engine. 17% of consumers will also include Facebook as part of their quest for ongoing deals, and 3% will search for deals on Twitter.”

Cutting off their fans from their chosen communication channel is only part of the story: customers expect to be able to subscribe to email communications.

2. Social media isn’t a replacement for email

Ben and Jerry’s may have more than 1.3 million Facebook fans, but it doesn’t mean that there’s no role for email in their marketing mix.

Email is direct and proactive, and when used well, can be personal and directly relevant. The way many brands use social media is as an impersonal broadcast that relies on fans visiting their Facebook pages. Email reaches out and can reactivate fans’ interest in a brand in a way that a social network can’t. Of course, social networks also engage fans in a way that email can’t. The two are highly complementary, and neither is a replacement for the other.

3. Just because it’s hard to measure doesn’t mean it doesn’t work

Unlike ecommerce sites, where email is the number one tool of choice for driving high quality traffic to an ecommerce website, Ben and Jerry’s don’t sell on line—the ice cream would melt. So while the quality of traffic you drive to your website may be directly correlated to your conversion rate on an ecommerce website, a conversion for Ben and Jerry’s is an in-store purchase. While you can certainly measure the use of promotion codes and vouchers in-store, it’s hard to gauge the footfall impact from an email campaign.

While Ben and Jerry’s may have financial motivation for dropping their email newsletter, perhaps they should have been focusing on how to make their newsletter altogether more relevant  and tightly integrated with the social media programs, rather than killing it altogether. In time, it is likely that this decision will be reversed—email is too important a channel to ignore.

The advent of some high profile ecommerce sites on Facebook, such as 1-800-Flowers and Disney’s Toy Story 3 ticket application, have sparked a debate about whether to build duplicate ecommerce sites (or subsets) on Facebook itself.

Ecommerce applications on Facebook have typically been promotional in nature, in support of a product launch or a specific promotion. Facebook has become a widely adopted alternative to building a promotional microsite. But in most cases, these microsites lead to the full ecommerce site for the transaction.

1-800-Flowers and others have built applications that enable Facebook visitors to purchase on Facebook. So given this, SeeWhy set out to research what marketers are planning to do.

On June 15^th, SeeWhy surveyed 476 marketers and asked about their plans for social commerce, i.e., the use of social media to drive ecommerce sales.

We found that three quarters of marketers (76 percent) plan to leverage Facebook for ‘social commerce’ initiatives. A further 20 percent are not yet sure, while only 2 percent have no plans to leverage Facebook for social commerce.

Sixty-seven percent plan to leverage Facebook to drive traffic to their ecommerce website, while 26 percent plan to build ecommerce applications on Facebook itself. A further 44 percent plan to use Facebook applications in place of microsites for launches and specific promotions.

Some eight weeks ago, Facebook announced its Open Graph and social plugins. By almost any measure, this can be considered one of the most successful launches in history. Within 24 hours Facebook had served 1 billion ‘Likes.’ Within one week, Facebook Like had been implemented on 50,000 websites. After only six weeks, more than 100,000 sites had implemented Facebook Like. Wow.

With Like, Facebook is set to challenge Google. Like is rapidly becoming an index of content on the web, where the index is built based on mass popularity as opposed to an arbitrary Google algorithm. The impact of this cannot be underestimated.

Facebook is the number one website in the world by page views and already refers more than twice the traffic to news and media sites than Google. Web users spend more time on Facebook than all the time spent on Google, Yahoo!, YouTube, Microsoft/Bing, Wikipedia and Amazon combined.

If Facebook is the next Google, then Facebook’s social plugins are your ‘SEO’ tool kit for optimizing social commerce. Of these, Facebook Like is, by far, the most important—and also the easiest to implement with just one line of HTML.

Given the impact of Facebook’s social plugins, we decided to run an internet survey of emarketers to discover how marketing plans have changed. 476 emarketers participated in the SeeWhy Research internet poll on Tuesday, June 15^th.

It’s taken only a matter of a few weeks for emarketers to act on this: Almost 7 out of 10 of the emarketers surveyed have already implemented Facebook Like or plan to implement it.

Since it is just as easy to unlike content, emarketers need to be responsible about how they use ‘Like.’ Sending a stream of irrelevant posts to your new Fan’s wall will result in a very quick ‘Unlike.’

Next in priority for emarketers’ implementations is Facebook ‘Login with Faces’ (which replaces Facebook Connect). Facebook Login enables visitors to log into their Facebook accounts on ecommerce websites with their Facebook credentials rather than creating site specific accounts. It’s so easy to do that Facebook reports that site visitors are three times more likely to use Login than create a specific website account.

Fifteen percent of emarketers surveyed had already implemented Facebook Login, with a further eighteen percent planning to do so. That one third of emarketers plan (or already offer) Facebook Login on their websites is significant. One of the reasons is that a user signing in with Facebook Login is consenting to share their personal details with the website. This opt-in is very valuable, and emarketers know this.

Once opted in, on-site activity can be tracked and associated with an identity, and following a session, the individual fan can be remarketed to via email. This has long been high up the wish list: to be able to market to Facebook visitors with special offers and promotions. This new capability will have to be used responsibly since the opt-in permission is controlled by the Fan in his/her account settings; so it’s easy to un-login, although not as intuitive as many of the more vocal Facebook privacy advocates would like.

To find out more about Facebook’s social plugins, take a look at SeeWhy’s educational webcast looking at their impact on ecommerce here.

You might also find this blog on the Top Three Facebook Social Plugins for eCommerce useful as well.