TOPIC 9 BUSINESS, GOVERNMENT AND RESEARCH PERCEPTIONS

Exercise 9.1: Is social networking a business model?



"Social networks operate under an autonomous business model, in which a social network's members serve dual roles as both the suppliers and the consumers of content. This is in contrast to a traditional business model, where the suppliers and consumers are distinct agents" (Wikipedia).

The advantages of having social networks as a business model are:

1. They connect people for a low cost, which helps those business just starting out.


2. Companies can use social networking for banners and other text based advertisements.


3. Allows for ease of contacts around the globe. One example is LinkedIn.com which has over 40 million users in over 200 countries.

The disadvantages of having social networks as a business model are:

1. Cultural differences
2. Technological infrastructure or the other party may not allow them access to your site.
3. Potential buyers may feel overwhelmed.
4. Small business owners may find it time consuming to keep up with social networking.
   

"Barack Obama's presidential victory demonstrated that platforms like YouTube and Twitter could transform electoral politics" (Forbes 09). Yet it would appear that many business executives feel that social networking is "a time-wasting distraction or a risk management problem. Much of their fear has focused on potential risks like security breaches and data privacy": (Forbes 09).

"Nonetheless, big brands, generally speaking, haven't successfully tapped the potential of social media; they tend to regard Web 2.0 platforms as just another way to push out short-term marketing campaigns. They fail to grasp that the new media require new ways of doing business. Old ways need to be tossed out" (Forbes 09). Lets face it! "Web tools like blogs can help corporate leaders enhance their credibility by communicating directly and having authentic conversations with key stakeholders" (Forbes 09).

reference:

Forbes 09 http://www.forbes.com/2009/03/11/social-networking-executives-leadership-managing-facebook.html
http://en.wikipedia.org/wiki/Social_network_service
http://www.gaebler.com/News/Small-Business-Technology/SMBs-may-see-some-disadvantages-to-social-networking-19173166.htm