Social Networking Sites Hit The Mainstream

Published Date: 02 Nov 2017

Chapter 2

2.1 Introduction

This section attempts to critically examine the literatures which are relevant to the core areas of concern of this research work. The literature of this research work deals with the popularity and influence of social networking sites in today’s world, the revenue models of different social networking sites and critical analysis on the impact of genealogy websites among internet users. This literature analysis will help the author to suggest the prospect of including an ancestry application in prominent social networking sites and thus to sustain the existing users and attract new users.

2.2 History of Social Networking Sites

The Early Years

The first recognizable social networking site was introduced in the year 1997 in the name of SixDegrees.Com. SixDegrees promoted itself as a social networking site to help people get connected with each other and send messages. Even though SixDegrees attracted millions of users, it couldn’t establish itself as a sustainable business and eventually got closed in 2000. The founder of SixDegrees said that failure of his venture was because "it was simply ahead of its time." The complaint of early adopter of SNS’s were of the opinion that there was little to do after accepting friend requests and they were not that keen about making strangers as friends. (Boyd and Ellison, 2008)

From 1997 to 2001, a new set of SNS’s came into existence such as Friends.AsianAvenue, MiGente and BlackPlanetto. All this allowed users to create professional, personal and dating profiles in which users can identify friends without seeking approval for those connections. Live Journal, Cyworld and LunarStorm are other SNS which emerged during this period. (Boyd and Ellison, 2008)

The next wave of SNS began in 2001 when Ryze.com to leverage business connections. Ryze’s founder has reported that, he started the site to his friends initially who were primarily from the San Franciso technology and business community. In particular, the people behind LinkedIn, Tribe.Net, Ryze and Friendster were tightly entwined professionally and personally. They believed they would not compete and will support each other. In the end, LinkedIn became more powerful business service than the rest. (Chafkin, 2007)

2.3 Social Networking Sites Hit the Mainstream

From 2003 onwards, many new SNS’s were launched. This prompted social networking analyst Clay Shirky to coin the term YASNS (Yet Another Social Networking Service). Most of the SNS’s which emerged during this period, took the form of profile-centric sites. While socially organized SNS’s target broad audience, professional networking sites such as LinkedIn, Xing and Visible Path focus on business people. SNS’s such as Dogster help users to get connected to strangers based on common interests, Care2 facilitates activists to meet and MyChurch joins Christian churches and their members. As the influence and publicity of social networking sites grew, websites which were focusing on began sharing media started customizing itself to SNS features and became SNS themselves. For example Last.FM (Music), Flickr(Sharing of photos) and youtube (Video sharing ). (Boyd and Ellison, 2008)

Social networking sites have become one of the fastest growing internet applications in the past two decades. There is a growing body of research on how social networking sites facilitate communication among its users and how to generate interactive communication between businesses and consumers. (Shanker and Malthouse, 2007) Nothing will more explain about the acceptance and fame other than the whooping number of registered users for social networking sites. According to Kaplan and Haenlein (2010), 75% of internet surfers used "social media" by joining social networks, reading blogs or contributing to shopping sites in the second quarter of 2008 and this represents a significant rise from 56 % in 2007. The growth of social networking sites is not only attributed to teenagers but also 35-44 year old people who increasingly populate the ranks of joiners, spectators and critics. (Kaplan and Haenlein 2010) The table below well explains the reach and popularity of social networking sites.

Rank

Social Networking Site

Description

Launched Year

Registered Users

1

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World’s No.1 social network. Estimated value of $100 billion

2004

750 Million

2

Popular in china

2005

480 Million

3

Worth $10 billion and has celebrity users

2006

200Million

4

Popular with students in China

2005

160 Million

5

Mostly used in Russia

2006

135 Million

6

Primarily used in Italy, Spain, France and Latin America

2006

124 Million

7

Bought from AOL by Criterion Capital partners for $10 billion

2005

117 Million

8

Professional Social network

2003

115 Million

9

Google owned site. Famous in India and brazil

2004

100 Million

10

Owned by specific media

2003

50 Million

Table 1: Most Popular Social Networking Sites

Source: Sparks, Mathew, (2011). The ten most popular social networking sites, [Internet], (23 August 2011) Available at : http://www.telegraph.co.uk/technology/google/8718580/The-ten-most-popular-social-networking-websites.html [Accessed on 19/12/2012]

Note 1: The writer of this research has used the written data in telegraph.co.uk to make it into tabular format.

2.4 What determines the success of Social Networking Sites?

A large or quickly growing user population characterizes successful social networking sites. The popular social networking sites grow their membership with the aid of viral marketing – the human behavior that prompts people to tell others about the products or services which are particularly good or bad. The value proposition for the user is determined in terms of the return on investment which is a measure of involvement such as time, energy or money. From the perspective of the service provider, they should get enough return on its investment – for instance staff, equipment advertising, and website maintenance. The term ‘successful’ does not necessarily have to be synonymous with ‘profitable’. There are certain social networking sites which are not profit oriented such as Wikipedia. Wikipedia is entirely funded by donations and its aim is to serve society by making vast store of human knowledge for free to everyone. (Weaver and Morrison, 2008)

2.5 Revenue Models for Social Networking Sites

As far as the research question is concerned, it is important to examine how including an ancestry application will add value to social networking sites and how it can be converted into sustainable revenue streams. For that it is necessary to write literature about the revenue models of different social networking sites. Initially, social networking sites were meant for personal interaction and not for business. However these sites have been transformed into lucrative platforms for businesses to market their products and services.

Various revenue models have been evolved over time for SNS’s. The revenue for most of the social networking sites comes in the form of advertising, transaction fees, subscription and sale of product or service. The below give table shows the revenue models of different social networking sites. (Enders et al., 2008)

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Table 2: Overview of Revenue Models of Selected Social Networking Sites

Source: Enders et al., 2008 The long tail of social networking. Revenue models of social networking sites. European Management Journal, 26, 199-211.

Advertising Model

It is evident from the table that, predominantly social networking sites rely upon advertising for revenue generation. The predominance for advertising model is mainly because of the tendency of users to demand free services. Websites which depend upon advertising model, it is important to attract differentiated, highly specialized customers to maximize revenues. On SNS, two forms of advertising are observed; affiliate models and banner advertising. In affiliate models, SNS’s will steer traffic to an affiliate website and will receive a referral fee or a percentage of revenues from a resulting sales. (Laudon and Trevor, 2006) In banner advertising, SNS operators charge fees for displaying advertisements on their website. (Canzer, 2006)

Subscription Models

Subscription model is the second major source of income for SNS’s. In a subscription model, the website offers all or some of its contents for a subscription fee. (Laudon and Trevor, 2007) In a subscription model, the basic features are free where as for the advanced features the users have to pay a fee. The subscription models are supposed to create high levels of unique customer value. Customer value is created primarily from user generated content, related activity and interaction. As users are expected to pay certain degree of consumer trust on the platform and peers is very much required, since the users are supposed to pay for the services they get. (Laudon and Trevor, 2007)

Transaction Models

The third source of revenue for SNS’s is through transaction model. Basically, there are two types of transaction models which are endogenous and exogenous transactions. Endogenous transactions are those that are carried out when users buy digital or physical goods and services from the platform provider. A classical example for this is the virtual gifts which can be purchased on the US platform Facebook. Exogenous transactions are those transactions which happen when the SNS provider sells third party content to its users or enables transactions between users. For example yellow page directory which was introduced by the US business networking site. In this scenario, platform operator benefits from a fee based on the volume of transactions conducted. (Laudon and Trevor, 2007)

2.6 Social Networking Sites and Advertising

Social Networking Sites have been very popular with users as well as advertisers. Social networking sites such as Facebook, Youtube, Digg and Twitter allow its users with facilities like parking lots, shopping malls and bars. Most of the users of these sites are teens who use it for trading music, photos, messages and blogs. The largest among these sites is Facebook. LinkedIn, Myspace, and Twitter are also running their business profitably (Subramanyan and Smahel, 2011).

Even though social networking sites are very popular, there is fair amount of criticism looming around social networking sites. The main criticisms against social networking sites are that it is very easy for predators to reach teenagers and children through their online profiles. As a matter of fact, business experts are skeptical about the long term success of social networking sites as a business model. The argument they put forward for this is that young audiences are erratic and will leave for the next best thing on the internet. Another argument tied with social networking sites is the questionable nature of contents published on these sites when tied to advertising strategies. (Ferrell and Hartline, 2011)

In spite of the criticisms associated with social networking sites, media companies and advertising companies are increasingly using social networking sites. The reason behind the inclination of media companies and advertising companies towards social networking sites is simple. The demographic profile of the audience of the social networking sites is very lucrative. MySpace audience is majorly in the age group 12 - 17. The fastest growing age segment for Facebook is 25 and over. Mean while LinkedIn has a different profile with an average age of 41. This powerful segmentation is a huge motivation for advertisers to consider social networking sites as a feasible media strategy (Ferrell and Hartline, 2011).

To add on to the demographic fortune, social networking sites allow firms to target the right audience and to collect valuable information about the users. For instance, Procter and Gamble introduced Secret Sparkle targeting 16 – 24 year old girls and women who use MySpace. Volkswagen also used MySpace for its GTI campaign. The campaign featured a German engineer called Helga, who maintained profiles on MySpace.

In essence, the social networking sites have turned out to be single stop shops which facilitate communication, commerce and information and they are in the process of replacing Google, MSN, Yahoo and AOL as the favorite web portals. Consumers have the luxury to buy products without leaving the social networking sites.

2.7 Major Perceived Opportunities and Risks of using Social Networking Sites

Even though there are lot of opportunities and gains by using SNS’s, the risks associated with the SNS’s can never be underestimated. According to Andres Sanchez, there is sizeable percentage of internet users who strongly protest against web surveillance and the number is ever increasing (Fuchs, 2012). Below gives table illustrates the major opportunities and risks of using SNS’s.

Opportunities

Risks

Possibilities of making contacts with unknown people

Finding and renewing old contacts from school, college or work.

Communication in interest groups or hobby groups.

The international or global nature of contacts.

Share and access photos, videos and music.

Entertainment, fun and amusement

Opportunity to spy on other’s profiles, know their interests, acquaintances.etc

Free communication that saves money

Business communication, prospect of finding jobs, potential employer and a platform for self presentation.

Mobility, access from anywhere

Self presentation to others for business or non-business reasons.

Private affairs may become public and will result in an infringement to privacy.

Lack of data protection may lead to surveillance by companies, state or individuals.

Personal profile may be accessed by employer or potential employer which may result in job losing.

Receiving advertisement or spam.

Superficial communications and impoverishment of social relations.

Personal data may be used for commercial purposes.

Data and identity theft.

Can be an addiction which may lead to wastage of time.

Disadvantage for students as their profiles can be accessed by professors.

Unrealistic, exaggerated self presentation

Virus, hacking and defacing of profiles

Haunting, harassment and probability of becoming a crime victim.

Table 3: Opportunities and Risks of Using Social Networking Sites

Source: Fuchs, Christian, Boersma, Kees, Albrechtslund, Anders and Sandoval,Marisol 2012, Internet and Surveillance The Challenges of Web 2.0 and Social Media Taylor and Francis : New York.

2.8 Online Genealogy

Back in the old days, publishing the family history means, doing so in the ink. But nowadays there are various websites are there which help you to publish the family history online. Internet revolution has dramatically increased the number of people interested in researching the past. The Library of Congress have found out that approximately 15 million people visited American Memory in the year 2003 alone which is more than the people who have researched in the library’s reading room in its two hundred year history. It is also one thousand five hundred times the number who annually uses the manuscript reading room. This incredible growth of online source material means that distance and time are no longer the constraints to research about one’s own roots (Powell, 2008).

The PEW research centre which actively do research centre on the impact of internet on the society found that three out of four internet users are keen to find out a hobby online, increasing 40 % from 65 million to 91 million internet users between the period March 2000 and January 2002. Internet is not only acting as a way forward for users with existing hobbies but also as a crucial player in the adoption of a new hobby. About.com’s most popular hobby sites include genealogy along with many other hobbies such as knitting, bird watching, wood working, jewellery making and quilting. (Veale, 2005)

With the advent of computers, genealogists embraced the online database and enjoyed ease of accessing their own genealogical research. They can also trade GEDCOM files from their genealogy software in place of typewritten reports. The database facilitated genealogists to go beyond what they had been able to discover when they relied upon traditional research approaches. The internet was vital in the chain reaction of access and technological revolution within genealogy. Internet has been used as a means to find genealogy as early as 1983 when genealogy based news group net.roots was introduced. Since internet facilitates the social and methodological aspects of genealogy, the hobby of genealogy is in accordance with internet. Because of the interactive nature of internet it facilitates hobbies which are all about sharing. The chat option, mailing facility, personal email messages all replace genealogical correspondence. (Veale, 2005).

Family history technology is in the middle of integrating separate data silos. Various genealogy websites such as Ancestry.com, Geni and Myheritage.com are in the process of integrating data which was kept isolated in individual computers to common spaces which are available to many users. The key problem with the current genealogy websites is synchronization. The problem of synchronization means that there is no common platform or widely accepted genealogy website for internet users to track their ancestry. Hence the family tree will remain separated from each other without large scale transferring of data from one place to another. Moreover users’ awareness of relevant information on other services is limited. (Hansen, 2008) Genealogy has been found as a dominant hobby activity for online seniors and it is one in which the internet has played a vital role in terms of knowledge sharing. (Veale, 2005) But the reach and popularity of prominent genealogy websites is negligible when compared to social networking sites. The most famous genealogy website Ancestry.com is having a subscription of 1.7 Million (Ancestry.com, n.d) where as world’s no.1 social networking site Facebook is having a registered users of about 750 million people (The Telegraph, 2011). Facebook started functioning in the year 2004 as a Harvard only social networking site. Eventually in 2005, Facebook expanded to include high school students, professionals and finally to the general public (Cassidy, 2006). But the most prominent genealogy website ‘Ancestry.com’ started its operations in 1983 and only have subscribers which is .002% of the total registered users of Facebook. Moreover, the services provided by most of the well acclaimed genealogy websites are paid ones where in most of the services provided by social networking sites are free of charge.

The growth of the internet as an essential medium for finding genealogy is not about positives only. The concerns about finding genealogy online are concerns about information quality and veracity, intrusion into privacy, possibility of identities to be stolen and commercialization of information which was free previously. Finding genealogy with the help of internet has resulted in "quickie genealogist" – which means those who use others work, not considering the basic genealogical methodology and not acknowledging others work. A wired news report says that online genealogy is a new threat to privacy (Veale, 2005).

Another important aspect of online genealogy is volunteerism which encapsulates the principles of gift economy – as genealogists search for local repositories for researchers who are distant, trade information and invest time for transcription projects which are of common interest. At the same time, genealogy can’t be seen as an entirely free service. There is a small amount of fees involved in paying genealogy society fees, access fees to libraries and documentation costs. To conclude with, even though the internet has the potential to enhance both collaborative and voluntary information sharing, the commercialization aspect in these activities produce conflict and concern which is in contradiction to before mentioned tradition of volunteerism in genealogy (Veale, 2005).