Social Networking Sites

• Introduction– What is SNS ?– Key Drivers

• Major players • Business model• Revenue and breakup• Japan, China - key trends• Impact on Telcos• Emerging Trends and Issues

Introduction• SNS is a platform to build social networks or social relations among people that

allow users to share ideas, pictures, posts, activities, events & interests with people in their network.– American-based services such as Facebook, Google+, LinkedIn, Tumblr,

Pinterest and Twitter widely used worldwide– XING in parts of Europe– Hi5 and Orkut in South America and Central America– Cyworld, Mixi, Orkut, renren, Sina Weibo and Wretch in Asia and the Pacific

Islands• Why is it important for business today?

– Average Indian spent 25% of his/her online time on social networking sites– Target their customers in a more informed way and also gain real-time

feedbacks– Customer engagement and brand building– Deepening relationships with their customers

Key Drivers

• Technology Evolution• Mobility

Feature Phone

Smart Phone• Seamless Connectivity due

to evolution of broadband• Globalization• Peer Pressure & Changing

behavioral pattern of users

Major Players1. Social ConnectionFor keeping in touch with friends and family members.• Facebook: to build connections and share information with people.• Twitter: keep up with others via real-time information network.• Google+: designed to allow users to build circles of contacts and can

interact in circles.• My space: has evolved to focus on social entertainment.

Name Number Of Users Monthly Visitors Alexa RankFacebook 1,000,000,000 800,000,000 2Twitter 500,000,000 250,000,000 9Google Plus+ 500,000,000 150,000,000 10Orkut 100,000,000 22,000,000 319Hi5 80,000,000 18,000,000 902Pinterest 50,000,000 140,500,000 26MySpace 30,000,000+ 26,500,000 161

2. Multimedia SharingTo share video and photography content online. • YouTube: allows users to share and view video content.• Flickr: for managing digital photographs online and sharing them with

others.• Picasa: offers integrated tagging and sharing with Google+.

3. InformationalMade up of people seeking answers to everyday problems. Forums filled with people who are looking for the same kind of information.• Super Green Me: individuals interested in adopting green living practices

can interact.• HGTV Discussion Forums: individuals interested in home design

improvement.• Do-It-Yourself Community: to interact with each other.

4. ProfessionalProvide opportunities for career-related growth. Some of these types of networks provide a general forum for professionals to connect, while others are focused on specific occupations or interests. • LinkedIn: to build relationships by making connections and joining

relevant groups.• Classroom 2.0: to help teachers and professors to connect.• Nurse Connect: individuals in the nursing profession connect and

communicate with each other.

5. EducationalTo collaborate students with professors and teachers via blogs and classroom forums.• The Student Room: featuring moderated message board and useful

resources related to school• The Math Forum: to connect students with an interest in math.• ePALS School Blog: to build international connections.

Promotion Revenue

• Facebook offers a unique combination of reach, relevance, social context, and engagement to the advertisers.

– Advertisers can engage with users based upon the information shared by users such as Age, Gender, Location, Education, Work history or specific Interests.

• Facebook offers developers an online payment infrastructure that enables developers to receive payments from the users in an easy-to-use and secure environment.

• Facebook is investing heavily into Facebook-owned data centers. This is to support user growth, increased user engagement, and delivery of new products.

How does Facebook advertising Works?

Facebook Revenue Stream (Revenue $5,089 millon)

1) Text & Display Ads – represents 60% of the company’s equity value Facebook offers both

1. Cost per click (CPC): For which advertisers pay only when users actually click on the advertisement

2. Cost per thousand impressions (CPM): For which advertisers pay based on the number of times these advertisements are displayed on user

Self-serve ads that can be highly targeted to appear to specific users Makes money based on how many pages are visited and the bidding rates on these advertisements. Provides real-time feedback on the size of the target audience and the suggested bid range to

achieve impressions.

2) Credits on Games & Applications - 17% Facebook has its virtual currency called Credits It is the exclusive payment method for most of the games created by Zynga Facebook users can also purchase virtual gifts from third party applications using Facebook Credits

3) e-Commerce – 11% Facebook has partnered with retailers like Amazon and eBay to leverage its large base of users

looking for advice before making a decision as to which product to buy

Twitter's Revenue Streams (Revenue $ 520 million)

1. About 85% of it’s revenue comes from advertising on its site.2. More than 65% of Twitter's advertising revenue was generated from mobile devices3. Twitter tends to charge its advertisers according to the amount of interaction their content

generates.4. It also has a "bidding" system in which advertisers compete with each other to have their

content appear in a particular space.

Data licensing is Twitter's second major revenue stream• It sells the "firehose“- it is public data, which often adds up to about 500 million tweets

per day

Other revenue generating onsite activities are:-• Promoted Accounts are offered through Cost-Per-Follow (CPF) auction, where a business

is charged when a user converts into a follower.• Promoting a whole account: are offered through Cost-Per-Engagement (CPE) auction,

where engagement is defined as click, favorite, retweet, or reply of a promoted tweet.• Promoting a trend : Promoted Trends appear at the top in the Trends section

LinkedIn Revenue Sreams (Revenue $984 million)

• LinkedIn is a good example of a Freemium business model.• LinkedIn revenues come from 3 key revenue streams:

Talent Solutions: Revenue from Talent Solutions products totaled $560.7 million– Talent Solutions revenue represented 57% of total revenue

Marketing Solutions: Revenue from Marketing Solutions products totaled $226.5 million– Marketing Solutions revenue represented 23% of total

Premium Subscriptions: Revenue from Premium Subscriptions products totaled $168.80 million– Premium Subscriptions represented 20% of total– Revenue from the U. S. represented 62% of total – Revenue from international markets represented 38% of total– Revenue from the field sales channel represented 58% of total revenue – Revenue from the online, direct sales channel represented 42% of total revenue

• On 3 May 2012, LinkedIn announced acquisition of Slideshare, a leading professional content sharing community, for $118 Million.

Social Media - India

Social Media - China• The world’s biggest Internet user base—513 million people• China also has the world’s most active environment with more than 300 million

people using social media and other online communities.• China’s users spend more than 40 percent of their time online on social media• Facebook was blocked following the July 2009 Ürümqi riots because Xinjiang

independence activists were using Facebook as part of their communications network.

• Very Active Bloggers- 90% of the Chinese Internet population actively reads blogs. 81% actively write blogs.

• Popular Social Media Platforms:– Sina Weibo- 200 Million– Kaixin001- 120 million– Douban- 30 million– RenRen- 31 million

Chinese Counter Parts

Social Media - Japan• Japan is the 4th largest population of Internet users in the world• 80% of the population uses the Internet. The penetration rate of social media in Japan is

19%• Social network users in Japan in Sep, 2013 was 47.8 million• Japan accounts for the 3rd most bloggers in the world with 4.9%. Japanese bloggers make

more than 1,000,000 blog posts each month• Micro blogging Facts-

– Twitter was launched in 2006 and has been embraced far more rapidly by the Japanese mainstream as compared to the likes of Facebook, MySpace, and eBay.

– According to studies, 16.3 percent of Japanese web users tweet, as opposed to just 9.8 percent in the U.S.

– On Dec 14th 2012, Twitter confirmed that Japanese users had once again recorded the highest number of tweets per second.

• Japan has always been one of the outliers in the region• Top social media websites:

– Mixi- 23million– Facebook- 16.5 million– Gree- 29 million– Twitter-30 million

Year SNS users in Japan FB users in Japan

2011 39.5mn 7.6mn (+61.6%)

2012 44.7mn 11.5mn (+51.5%)

2013 47.8mn 16.5mn (+43.0%)

2014* 50.7mn 19.5mn (+18.7%)

Impact of SNS on Telcos

• The widespread social networking phenomenon reflects shifts in two long-term communication trends:– There is a shift in communication patterns– from point-to-point, two-

way conversations to many-to-many, collaborative communications.– Control of the communication environment is transitioning from Telcos

to open Internet platform providers, enabled by better and cheaper technology, open standards, greater penetration of broadband services and wireless communication networks.

• The combined effect of these trends is altering the competitive landscape in communications and giving rise to emerging business models that include:– Open & Free business model– Gated Communities business model– Shared Social Spaces business model

• SNS and Education • Professional uses within education• Constraints of social networking services in

education• Social networks and grassroots organizing• Social networks and employment• Social trading networks• Legal and criminal investigations

Emerging Trends

• Privacy• Data mining• Access to information• Potential for misuse• Unauthorized access• Risk for child safety• Trolling• Online bullying

Issues

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