SOCIAL NETWORKING

1. Siddhartha Sharma (09BM8048)
Varun Wadhwani (09BM8060)
VGSoM, IIT Kharagpur
Ecommerce – Social Networking

2. Introduction
•Websites focused on building online communities of people
having shared interests.
•Social networks have common themes of information
sharing, person-to-person interaction and creation of shared
& collaborative content.
•The industry has been successful in getting a large number
of people at one place, but not very successful in
monetization.
•Two-thirds of the world’s Internet population visit a social
network or blogging site and the sector now accounts for
almost 20% of all internet time.

3. Some Statistics(2010)
• 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
• 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

4. Some Statistics (2010)
• BlackPlanet users spent 3.6 minutes more on the site than the
average Facebook visitor
• MyYearbook and Tagged users spent around 3 minutes more
than the average MySpace visitor
• Facebook witnesses more than 65 billion page views par
month
• More than 14 million photos* are uploaded on Facebook and
8 million photos on myspace daily .
*source: www.facebook.com

5. Key Players
Facebook
Founded: 2004
No. of users: 600 million
Revenue: US$800 million
Alexa Rank: 2
Revenue from: Banner ads, referral marketing,
partnerships, branding elements, virtual
currency

6. Key Players
Twitter
Founded: 2006
No. of users: 190 million
Revenue: US $150 million (projected 2010)
Alexa Rank: 9
Revenue from: verified accounts,
advertisements (promoted trends)

7. Key Players
Myspace
Founded: 2003
No. of users: 100+ million
Revenue: US$385 million (2009 est.)
Alexa Rank: 68
Revenue from: advertisements, Google AdSense

8. Key Players
LinkedIn
Founded: 2002
No. of users: 100+ million
Revenue: US$161.4 million (Jan. – Sep. 2010)
Alexa Rank: 18
Revenue from: premium accounts, hiring
services, advertisements, partnerships,
Google AdSense

9. Key Players
Orkut
Founded: 2004
No. of users: 120 million
Alexa Rank: 106
Revenue from: advertisements

10. LifeCycle

11. Top 10 in India(no. of users)
Total Unique Visitors (000)
Site July 2009 July 2010 % change
Facebook 7,472 20,873 179
Orkut 17,069 19,871 16
Bharatstudent.com 4,292 4,432 3
Yahoo! Pulse N/A 3,507 N/A
Twitter 984 3,341 239
LinkedIn N/A 3,267 N/A
Zedge 1,767 3,206 81
Ibibo 1,562 2,960 89
Yahoo! Buzz 542 1,807 233
Shtyle.fm 407 1,550 281
Total 23,255 33,158 43

12. Top 10 Social Networking
Markets
Total Unique Visitors (000)
Market July 2009 July 2010 % change
United States 131,088 174,429 33%
China N/A 97,151 N/A
Germany 25,743 37,938 47%
Russian Federation 20,245 35,306 74%
Brazil 23,966 35,221 47%
United Kingdom 30,587 35,153 15%
India 23,255 33,158 43%
France 25,121 32,744 30%
Japan 23,691 31,957 35%
South Korea 15,910 24,962 57%
Total 770,092 945,040 23%

13. Top Social Networking Sites (monthly visits)

14. Top SN sites in India(avg. time spent/visit)

15. Social Networking sites for India

16. Social Networking sites for India

17. Social Networking sites for India

18. Social Networking Activities

19. Revenue Models
• Premium Services: example- LinkedIn
• Advertisements
– Cost per click (CPC)
– Cost per action (CPA)
– Cost per thousand viewers (CPM)
• Micropayments: small payments for upgrades
• Partnerships: create profiles for partners. example-twilight, Apple iTunes with
Facebook, Simply Hired on LinkedIn
• Branding elements with applications: example- Living Social application on
Facebook
• Virtual Currency: online applications(games). Real money for virtual goods. Annual
revenue of two year old firm Zynga estimated $100 million in 2009
• Virtual Gifts: more than $1 billion for US users in 2009
• Surveys: pay members to participate and profit from selling access to its successful
audience. Example: LinkedIn

24. External Environment Analysis

25. Threat of New Entrants (Medium)
Capital requirement for the new player
is low
Brand loyalty is missing
-Specialty networks (eg. Last.fm) are
still entering the online space
-No Sales force
Buyer Power (High)
- Switching costs are
minimal
-Users maintain more
than 1 accounts on social
networking sites and
check both accounts in
transition periods
-Little difference in the
service providedThreat of Substitutes (Medium)
- Internet sites with large user
bases may create a social
networking component
(blockbuster, amazon)
-Physical data storage
Supplier Power (Low)
- Widgets and Apps
providers are usually
small developers with
little bargaining power
Industry Rivalry (High)
- Intense competition
between competing sites
fueled by venture capital
and speculative
valuations
Porter’s Five Forces

26. •Design – Ease of use, Attractiveness etc.
•Target Market – Some sites target niches, some target
goegraphies
•Activity Focus – Target market can be connecting people
over relationships, or over shared interests
•User Engagement – Site needs to retain user minutes
•Transactions– Innovative features like applications
•Privacy –privacy filters and controls
•Entry Barriers – Easy sign ups
•Trust – Different outlooks to Trust.
•Localization– Local content, languages etc.
Possible Success Factors for the industry

27. SOCIAL MEDIA-Analyzing the competitiveness
T-Factor Question to be asked Function of
Transactions Do the transactions on your site,
make a difference to the users life?
Are they repeated?
Repeat
transactions
Targeting Can the site distinguish between
the preferences, likes/dislikes of
two users?
Targeted
Advertisements
and Content
Time Do your users spend time on your
site? Are you an industry leader in
user enagements?
User
Engagement &
Content

28. Facebook - SWOT Analysis

29. Facebook - SWOT Analysis

30. Long Term Objectives

31. Recommendations

32. Thank You!