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Ecommerce-Social Networking

Submitted by:

Team: Tycoons Siddhartha Sharma 09BM8048 Varun Wadhwani 09BM8060

1|P ag e

ContentsSocial Networking-Introduction ......................................................................................................... 4 Key Players ........................................................................................................................................ 5 Lifecycle of Social Networks............................................................................................................... 6 Top Social Networking Sites............................................................................................................... 7 In India .......................................................................................................................................... 7 Top 10 Social Networking Markets .................................................................................................... 9 Most popular Social Networks Globally........................................................................................ 10 Social Networking Sites for India ..................................................................................................... 11 Revenue Models.............................................................................................................................. 13 Premium Services ........................................................................................................................ 13 Advertisements ........................................................................................................................... 13 Cost per click (CPC) .................................................................................................................. 14 Cost per action (CPA) ............................................................................................................... 14 Pay per lead (PPL) .................................................................................................................... 14 Micropayments ........................................................................................................................... 14 Partnerships ................................................................................................................................ 14 Branding Elements....................................................................................................................... 14 Virtual Currency........................................................................................................................... 15 Virtual Gifts ................................................................................................................................. 15 Surveys ........................................................................................................................................ 15 Recommendations: Possible areas to explore .................................................................................. 17 Government applications............................................................................................................. 17 Business applications ................................................................................................................... 17 Educational applications .............................................................................................................. 17 Medical applications .................................................................................................................... 17 Porters Five Forces ......................................................................................................................... 18 Conclusion from Porters Five Forces Analysis.............................................................................. 18 SWOT Analysis of the Social Networking Industry ............................................................................ 19 PEST Analysis of the Social Networking Industry .............................................................................. 20 Possible Success Factors of the Industry ...................................................................................... 20

SOCIAL MEDIA-Analyzing the competitiveness ............................................................................. 21 Facebook - SWOT Analysis ............................................................................................................... 22 Recommendations to Facebook....................................................................................................... 23 Long term objectives ....................................................................................................................... 24 Recommendations .......................................................................................................................... 24 References ...................................................................................................................................... 26

Social Networking-IntroductionOxford dictionary defines a social network as a network of social interactions and personal relationships. In terms of virtual world, it defines a social network as a dedicated website or other application which enables users to communicate with each other by posting information, comments, messages, images, etc. Social networking sites offer their users new and varied ways to communicate via the internet, whether through their PC or their mobile phone. The social networking sites have become immensely popular in the last decade. Their users have increased by leaps and bounds. Although these sites have been able to attract a large number of users, they have not been very successful at monetization. Monetization means conversion of number of users into actual revenue for the company. According to a study by Nielson Company, 89 per cent of 15-20 year olds in India access a social networking site everyday and 60 per cent of them spend at least half an hour on social networking each day. Following are some of the statistics associated with Social Networking: The world now spends around 22 percent of all time online on social networks and blog sites The average visitor spends 66% more time on these sites than a year ago 9 out of every 10 U.S. Internet user now visiting a social network in a month CNN's international readership found that 43% of online news sharing occurs via social media networks and tools The number of users registered for virtual world sites broke the 1 billion mark during 2010 MyYearbook and Tagged users spent around 3 minutes more than the average MySpace visitor Facebook witnesses more than 65 billion page views per month More than 14 million photos are uploaded on Facebook and 8 million photos on myspace daily

Another interesting figure was that BlackPlanet, a relatively unknown social networking site, users spend 3.6 minutes more on the site than the average Facebook visitor. This shows that BlackPlanet may have

Key Players

Facebook is a social networking website founded in 2004. It has more than 600 million active users. Facebooks 2010 revenue is estimated around $2 billion. Most of its revenue comes from advertising. Microsoft is Facebook's exclusive partner for serving banner advertising, and only serves advertisements that exist in Microsoft's advertisement inventory. Facebooks click through rate, which is a measure of conversion of an advertisement into actual revenue through clicks, is lower than most other websites. Majority of its revenue comes from banner advertisements, referral marketing, partnerships, branding elements, and virtual currency. Alexa rank, which measures traffic on websites, of Facebook is 2 while Google has an Alexa rank of 1.

Twitter is a social networking and microblogging website founded in 2006. It has more than 200 million active users and has revenue of around $150 million (projected 2010). Its users generate an average of 65 million tweets a day and handling over 800,000 search queries per day. Its revenue per user is very low and is therefore exploring new avenues of generating revenue. For this reason, Twitter hired a Adam Bain, a News Corp veteran, as President of Revenue. Twitter is also exploring the possibility of promoted tweets in order to generate revenue and has already signed up a number of wishing to advertise through this medium, including Sony Pictures, Red Bull, Best Buy, and Starbucks to name a few. Its revenue comes from verified accounts, banner ads, referral marketing, and casual game. Alexa rank of Twitter is 9.

Myspace is a social networking site founded in 2003. It has more than 100 million active users and has revenue of around $385 million (2009 estimated). Myspace

relies solely on advertisements for revenue at doesnt have any pay-for feature and uses behavioural targeting to select ads for each user. Majority of its revenue comes from Google Adsense and other targeted advertisement. Alexa rank of Myspace is 72.

Linkedin is a business-oriented social networking site founded in 2002. Linkedin is mainly used for professional networking. As of 22 March 2011, LinkedIn had more than 100 million registered users and its monthly unique visitors have been estimated around 47.6 million. Its revenue for the first 9 months of 2010 was $161 million. The company was ranked #10 by Silicon Valley Insider on its Top 100 List of most valuable start ups. Its gated access approach is intended to build trust among its users. In 2008, LinkedIn launched DirectAds as a form of sponsored advertising. Majority of Linkedins revenue comes from premium accounts, hiring services, advertisements, partnerships, Google AdSense. Alexa rank of Linkedin is 17.

Orkut is a social networking s