Extending its dominion yet again, Amazon has acquired Shelfari, a social networking site for booklovers that allows readers to display a virtual bookshelf and share reviews. The announcement came through the Shelfari blog last week.

Earlier in the year, Amazon had chipped in $1 million in funding for the growing site.

The acquisition presents some interesting conflicts for Amazon. Just one month ago, the e-tail giant acquired AbeBooks, a online dealer in used, rare, and out-of-print books. AbeBooks — and now Amazon — is a 40% stakeholder in LibraryThing, a bitter Shelfari rival.

Will Amazon try to buy up the remainder of LibraryThing and merge it with Shelfari? Given the public animosity between the two sites, the more likely course may be for Amazon to divest itself of its LibraryThing holdings.

Whichever way it goes, authors who haven’t been using social networking sites like Shelfari to build word of mouth for their books online should get started. With further integration between Shelfari and Amazon in the cards, more online reviews could easily equal more sales.

Print newspapers continue to cut back their book review sections. Anyone surprised? You shouldn’t be. Waaaaay, way back in 2001, dwindling book review sections were cause for alarmist headlines about the war on culture.

Today, the print space dedicated to books continues to decline. And yet book buzz is greater than it ever was. It’s just moved to a Web 2.0 space.

Even while print publications cut down their book space, many of those same publications have recently launched new book blogs. Check out Paper Cuts from the New York Times or Jacket Copy from the Los Angeles Times as just two examples.

Then there are the countless blogs run by readers and other “amateur” reviewers, and the thriving social networks built around books. Look at Shelfari, a social network where members swap book info, or LibraryThing, where users can build a virtual bookshelf and delve into discussions with other members.

As in many industries, the power of buzz has moved away from a small number of credentialed cultural arbiters to online communities and social networks. There are countless opportunities to get the word out about your book, without having to worry about a big print review.