As the social web grows up, their is a lot of discussions on making money, but not a lot of specifics discussed. Better yet, few examples of companies innovating to increase sales in new ways. E-Commerce is nothing new to the web, but has the web gets social it to has to change.

I stumbled across a great example of a using wisdom of the crowds and the spirit of competition to promote and sell products. Amazon, an e-commerce retailer who has long been know for innovation and its willingness to try new things has started something new with its MP3 download service and its use of Twitter.  If you take a quick look at the image that leads into this post, you will see that Amazon MP3 has started using its Twitter feed differently. Until recent the service’s Twitter feed was only a listing of its daily music sales. This week that changed when they announced #bandbattle.

For #bandbattle Amazon picks two bands and then has followers tweet @ replies for the band they like the most. The band with the most replies will have its records put on sale on Thursday by Amazon.   I love this approach to using competition to determine special sales and the big upside is that with Twitter’s ability to spread word-of-mouth makes it a great promotion platform for the bands. I am not sure if Amazon is taking the loss on the sales, but if it is, it should work to partner with bands for the sales so it can reduce losses as it is providing marketing support.

Check out which band is getting the most votes.

Can this approach work for all companies? Probably not, but is can certainly extend well beyond the music business.

What do you think?