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Chapter 11 - Social networks, auctions, and portals. The topics discussed in this chapter are: Social network fever spreads to the professions, social networks and online communities, what is an online social network? the growth of social networks and online communities, types of social networks and their business models,...
Ecommerce: Business. Technology. Society Ecommerce business. technology. society seventh edition Kenneth C Laudon Copyright © 2011 Pearson Education, Inc Copyright © 2011 Pearson Education, Inc Carol Guercio Traver Chapter 11: Social Networks, Auctions, and Portals Chapter 11 Social Networks, Auctions, and Portals Copyright © 2011 Pearson Education, Inc Copyright © 2011 Pearson Education, Inc Copyright © 2010 Pearson Education, Inc Slide 112 Social Network Fever Spreads to the Professions Class Discussion How has the growth of social networks enabled the creation of more specific niche sites? What are some examples of social network sites with a financial or business focus? Describe some common features and activities on these social network sites What features of social networks best explain their popularity? Copyright © 2011 Pearson Education, Inc Slide 113 Social Networks and Online Communities Internet began as community building technology for scientists, researchers Early communities limited to bulletin boards, newsgroups; e.g the Well 2002: Mobile Internet devices, blogs, sharing of rich media began new era of social networks Social networks one of most common Internet activities Copyright © 2011 Pearson Education, Inc Slide 114 What Is an Online Social Network? Online area where people who share common ties can interact Participants not necessarily share goals Portals and social networks: Moving closer together Portals adding social network features Community sites adding portal-like services Searching News E-commerce services Copyright © 2011 Pearson Education, Inc Slide 115 The Growth of Social Networks and Online Communities Top 10 social networks account for over 90% social networking activity Facebook users: Over 54% are 35+ Unique audience size: Social networks: 175 million Top search engines: 510 million Annual advertising revenue Social network sites: $1.6 billion Top search engines: $14 billion Copyright © 2011 Pearson Education, Inc Slide 116 Top 10 Social Network Sites, 2010 Figure 11.1, Page 714 Copyright © 2011 Pearson Education, Inc SOURCES: Based on data from eMarketer, 2010; Hitwise, 2010 Slide 117 Types of Social Networks and Their Business Models Early social network sites relied on subscriptions Today primarily advertising General communities: Offer opportunities to interact with general audience organized into general topics Advertising supported by selling ad space on pages and videos Practice networks: Offer focused discussion groups, help and knowledge related to area of shared practice May be profit or non-profit; rely on advertising or user donations Copyright © 2011 Pearson Education, Inc Slide 118 Types of Social Networks and Their Business Models (cont’d) Interest-based social networks: Affinity communities: Offer focused discussion groups based on shared interest in some specific subject Usually advertising supported Offer focused discussion and interaction with other people who share same affinity (self or group identification) Advertising and revenues from sales of products Sponsored communities: Created by government, non-profit or for-profit organizations for purpose of pursuing organizational goals Copyright © 2011 Pearson Education, Inc Slide 119 Social Network Features and Technologies Profiles Instant messaging Friends network Message boards Network discovery Online polling Games, widgets, apps Chat Discussion groups Experts online Membership management tools Favorites E-mail Copyright © 2011 Storage Pearson Education, Inc Slide 1110 Types of Auctions (cont’d) Name Your Own Price Auctions Users specify what they are willing to pay for goods or services and multiple providers bid for their business Prices not descend and are fixed Group buying auctions (demand aggregators) Group buying of products at dynamically adjusted discount prices based on high volume purchases Two principles Sellers more likely to offer discounts to buyers purchasing in volume Buyers increase their purchases as prices fall Copyright © 2011 Pearson Education, Inc Slide 1121 Types of Auctions (cont’d) Professional Example: Auction service auctions Elance.com aggregators (mega auctions) Use Web crawlers to search thousands of Web auction sites and accumulate information on products, bids, auction duration, etc Unlicensed aggregators opposed by eBay Copyright © 2011 Pearson Education, Inc Slide 1122 Copyright © 2011 Pearson Education, Table 11.7, p 733 Inc Slide 1123 Seller and Consumer Behavior at Auctions Seller profit: Arrival rate, auction length, and number of units at auction Auction prices not necessarily the lowest Unintended results of participating in auctions: Winner’s regret Seller’s lament Loser’s lament Consumer trust an important motivating factor in auctions Copyright © 2011 Pearson Education, Inc Slide 1124 Auction Profits Figure 11.5, Page 744 Copyright © 2011 Pearson Education, Inc SOURCE: Vakrat and Seidmann, 1998 Slide 1125 Insight on Society Swoopo: Online Auction or Game of Chance? Class Discussion What are the similarities of Swoopo to auctions? To gambling? Are there any ethical considerations posed by Swoopo’s business model? Is Swoopo essentially a deceptive experience? Why or why not? What other sites or online experiences contain deceptive elements? Copyright © 2011 Pearson Education, Inc Slide 1126 When Auction Markets Fail: Fraud and Abuse in Auctions Markets fail to produce socially desirable outcomes in four situations: Information asymmetry, monopoly power, public goods, and externalities Auction Most markets prone to fraud common: Failure to deliver, failure to pay In 2010, 10% Internet fraud complaints concern online auctions Copyright © 2011 Pearson Education, Inc Slide 1127 Ecommerce Portals Most frequently visited sites on Web Original portals were search engines As search sites, attracted huge audiences Today provide: Navigation of the Web Commerce Content (owned and others’) Compete on reach and unique visitors Enterprise portals Help employees find important organizational content Copyright © 2011 Pearson Education, Inc Slide 1128 Top 5 Portal/Search Engines in U.S Figure 11.5, Page 746 Copyright © 2011 Pearson Education, Inc SOURCE: Based on data from comScore, 2010 Slide 1129 Insight on Business The Transformation of AOL Class Discussion What types of decisions led to AOL’s decline in popularity? What posed the greatest competition to What are AOL’s current strategies? AOL? Are the new strategies valid? Do you think they will succeed? What is the business value of AOL? Copyright © 2011 Pearson Education, Inc Slide 1130 Types of Portals General purpose portals: Attempt to attract very large general audience Retain audience by providing in-depth vertical content channels e.g Yahoo, MSN Vertical market portals: Attempt to attract highly focused, loyal audiences with specific interest in: Community (affinity group); e.g iVillage.com Focused content; e.g ESPN.com Copyright © 2011 Pearson Education, Inc Slide 1131 Two General Types of Portals: General Purpose and Vertical Market Portals Figure 11.6, Page 747 Copyright © 2011 Pearson Education, Inc Slide 1132 Portal Business Models ISP services (AOL) Provide Web access, e-mail for monthly fee General advertising revenue Tenancy deals Fixed charge for number of impressions, exclusive partnerships, “sole providers” Commissions on sales Subscription fees Charging for premium content Applications and games Copyright © 2011 Pearson Education, Inc Slide 1133 Revenue per Customer and Market Focus Figure 11.7, Page 749 Copyright © 2011 Pearson Education, Inc Slide 1134 All rights reserved No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher Printed in the United States of America Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Copyright © 2011 Pearson Education, Inc .. .Chapter 11: Social Networks, Auctions, and Portals Chapter 11 Social Networks, Auctions, and Portals Copyright © 2 011 Pearson Education, Inc Copyright © 2 011 Pearson Education, Inc... network features Community sites adding portal-like services Searching News E-commerce services Copyright © 2 011 Pearson Education, Inc Slide 11 5 The Growth of Social Networks and Online Communities... “closed worlds” like Facebook? Copyright © 2 011 Pearson Education, Inc Slide 11 11 Online Auctions Online auction sites among the most popular consumer-to-consumer sites on the Internet eBay: