April 24, 2012
What do Facebook, Foursquare, and Twitter all have in common? American Express (NYSE: AXP ) is using each network to broker social transactions, and in the process is proving there are tangible reasons for everyday businesses to get involved in the social sphere.
While each arrangement is different, the essential elements are the same. Link an American Express card to your social network and get access to deals. Here's a closer look at the various options:
- With Foursquare, Amex allows those who check in to collect coupons specific to where they are. I've used this strategy multiple times at both local and national chains. Pay with your card and Amex typically kicks back a rebate within a week.
- For Facebook, Amex has an app called "Link, Like, Love" that tracks what you follow on the social network and then issues coupons matched to your interests. As with Foursquare, the arrangement also includes serendipitous savings when you check into a new spot.
- With Twitter , Amex asks you to tweet certain sponsored hashtags in exchange for discounts. Initial partners include Whole Foods Market (Nasdaq: WFM ) and Best Buy (NYSE: BBY ) . Each deal is tied to spending a certain minimum -- $75 at Whole Foods, $100 at Best Buy -- and then tweeting about the sale using the appropriate tag: #AmexWholeFoods and #AmexBestBuy, in this case.
Where is LinkedIn (NYSE: LNKD ) in all this? Nowhere yet, and I don't expect that to change soon. Retail commerce isn't in LinkedIn's DNA. Nor is social media. Rather, the company is a big data play that's beautifully positioned for how it aggregates and presents career information that wasn't easily accessible before.
American Express goes further by arranging transactions that might not occur otherwise. Everyone wins, giving the soft, murky opportunity of "social media" a hard currency edge. I like the idea enough that I've made an outperform CAPScall on American Express in my Motley Fool CAPS portfolio.
Think I'm wrong? That American Express is the exception and social media is an overhyped, sure-to-disappoint fraud? So be it. Safer choices are out there, including these six stocks that top professional investors are buying now.