Siddhartha Sharma (09BM8048)Varun Wadhwani (09BM8060)

VGSoM, IIT Kharagpur

Ecommerce – Social Networking

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.

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

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

Key Players

FacebookFounded: 2004No. of users: 600 millionRevenue: US$800 millionAlexa Rank: 2Revenue from: Banner ads, referral marketing,

partnerships, branding elements, virtual currency

Key Players

TwitterFounded: 2006No. of users: 190 millionRevenue: US $150 million (projected 2010)Alexa Rank: 9Revenue from: verified accounts,

advertisements (promoted trends)

Key Players

MyspaceFounded: 2003No. of users: 100+ millionRevenue: US$385 million (2009 est.) Alexa Rank: 68Revenue from: advertisements, Google AdSense

Key Players

LinkedInFounded: 2002No. of users: 100+ millionRevenue: US$161.4 million (Jan. – Sep. 2010)Alexa Rank: 18Revenue from: premium accounts, hiring

services, advertisements, partnerships, Google AdSense

Key Players

OrkutFounded: 2004No. of users: 120 millionAlexa Rank: 106Revenue from: advertisements

LifeCycle

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

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%

Top Social Networking Sites (monthly visits)

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

Social Networking sites for India

Social Networking sites for India

Social Networking sites for India

Social Networking Activities

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

External Environment Analysis

Threat of New Entrants (Medium)Capital requirement for the new player is lowBrand 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

•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

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

Facebook - SWOT Analysis

Facebook - SWOT Analysis

Long Term Objectives

Recommendations

Thank You!