Tag Archives: facebook

Can Twitter’s business model be monetized?

twitter users.001

Twitter’s online growth has exploded last year. It is becoming more popularized with news organizations, celebrities, businesses and users. With the increase of users can Twitter’s existing business model be sustainable? Can it be monetized? This article from Wharton explained how the Twitter website increased its user base from 475,000 in February 2008 to over 7 million in February 2009.

Has this venture been monetizable?  It has not been so far.  Some of Wharton’s professors have argued that the service can be replicated by rivals such as Facebook, and question whether it is simply a fad (e.g. ICQ, Friendster and MySpace).

Part of its draw for marketers and celebrities is the ability to tap into conversations real-time, providing instant online commentary for an offline event and to join in conversations with consumers.  From a user standpoint, it is easy to track like-minded people, friends and celebrities.  Can data mining be used as a revenue model?  The social networks on twitter tend to be less meaningful than on Facebook or even MySpace, and thus, the information would be less value to marketers.  Facebook is a platform that contains more personal information about the user such as the conversations that surround the user’s offline and online activities (e.g. photo albums, interactive quizzes, etc.).

With the large increase in users, could Twitter charge for premium services such as being able to input more than 140 characters or even charging for advanced search options for twitter search?  There needs to be a balance between growth and earning profits.  Currently, the demographics for twitter are mostly with Generation X (people born between 1964 and 1979).  Compare that to Facebook, where much of the growth was with Generation Y (people born between 1980 to 1995), and it expanded to other age groups.  This clearly illustrates that Twitter’s growth maybe stunted.

I think there is money to be made with the development of the APIs.  As Twitter’s base expands, more developers will want to develop more applications for it.  As this occurs, the additional features will attract more users.  Once a critical mass is reached, Twitter can start to charge developers for making APIs on their platform.

What do you think?  Can you think of possible areas that Twitter can be monetizable?  Or do you think it is simply a fad?

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Behavioral effects of Social Media Networking websites

Ever wonder why people post on the wall on Facebook rather than sending direct e-mail?  It is because people want to be visible and to be  recognized.  This is an example of online social grooming behavior.  Social grooming offline consists of exchanging pleasantries and small talk with people.  Social grooming amongst friends consists of checking-in (e.g. what’s up? what’s going on?, etc.)

On Facebook, there are applications such as online quizzes that reveal people’s interests to others, these are interactive, in which friends can comment and share the results to others.  These activities are mostly used by Generation Y as a way of self-expression.  The “about me” sections on Facebook and MySpace as well as the decoration of their profiles on MySpace are other examples of individuality and self-expression.  Generation X is the fastest growing demographic on Facebook, because of the need to reconnect to old acquaintances, and is driven by the curiosity about the status of former high school and college friends.  Gen Xers tend to use it as a social utility to communicate with the past versus Gen Yers who use it to strengthen with their current friends and acquaintances.

Ever wonder how some people on Facebook have over 500 friends? Is it even possible they have too many of them? It takes much mental computation to keep track of all of them.   There is a number called the Dunbar number, which states that most people cannot keep track more than 150 friends.  Even though we are more connected more than ever, it does not necessarily mean we have better connections with them. We continue to keep in contact with a select few number of friends.  According to this article in the Economist, the statistical breakdown for men versus women in the number of friends are the following:

Thus an average man—one with 120 friends—generally responds to the postings of only seven of those friends by leaving comments on the posting individual’s photos, status messages or “wall”. An average woman is slightly more sociable, responding to ten. When it comes to two-way communication such as e-mails or chats, the average man interacts with only four people and the average woman with six. Among those Facebook users with 500 friends, these numbers are somewhat higher, but not hugely so. Men leave comments for 17 friends, women for 26. Men communicate with ten, women with 16.

An issue that may arise is if one does not want to continue to communicate with some acquaintances  online on Facebook, MySpace and other social media networks or offline.  The difference between online and offline friend behavior, is that offline, meeting people occurs in a short period of time, afterwards, you may not see them again.   Online once you add a friend, “unfriending” them becomes politically onerous.

Social Websites (e.g. Facebook, etc.) enhance relationships…but at what costs?

In the world of social networks, the marginal utility of an application increases when the user’s friends usage rates increases.  Much of the reason of the emergence of the popularity of social websites such as Facebook, Twitter and MySpace is due to an increasingly number of users utilizing this service. 

In my earlier post, I had discussed the societal, economical and psychological benefits/drawbacks of social websites.  In this post, I will continue to discuss the role of online privacy.  In my earlier post today, I had discussed the balance between online privacy and targeted advertising.  Trying to seek a balance between the two is rather difficult.  There is a paradox that exists as the users become increasingly engaged online, their privacy increasingly erodes.      

One of the noted features of Facebook is a news feed, that automatically updates the activities of the user’s family, friends and acquaintances.  It is similar to an RSS feed, instead of seeking daily updates on a multitude of web pages, these feeds are instead fed to a single web page.   On Twitter, the user can update his/her status (what they are doing, where are they going, who are they seeing, etc.) with a maximum of 140 characters (similar to a text message) unlimited number of times per day.  Both Twitter and Facebook feed applications are similar, one feed is not meaningful by itself, and can be rather mundane.  Put together a collection of feeds that happen in one day, it becomes a story, and it paints a complete picture of the family member, friend, acquaintance or even a stranger that the person is following .  With Twitter one can update one’s feed and follow others’ feeds and know what the other user is feeling/thinking/doing, etc. on a constant basis especially when using a Blackberry device.  According to this article, social scientists refer to these incessant updates as “ambient awareness.”  Can people constantly read and absorb a multitude of messages on a daily basis?  Well, these feeds are meant to be scanned, akin to reading newspaper headlines, and is analagous to acting as ambient messaging. 

These feeds can become a conversation piece with friends the following day.  It ressembles reading someones mind.  For example, if one was meeting a group of friends at a coffee shop, and saw something interesting while in transit, he/she can “twitter” this neat occurrence to his/her friends real-time.  Once at the coffee shop, his/her friends would know what happened to the user on the way to the coffee shop.   

Being connected and engaged with these online social tools is not all rosy, the article discusses how this constant self-disclosure created difficulty with one user withdrawing from this online world because she wanted to know if people were discussing events behind her back.  Some employers and college admission boards are now utilizing these online social tools to screen potential job candidates.   

In the end, users need to balance the enhancing social capital vs online privacy paradox.  The constant self-disclosure could be used as a method for catharsis, which inadvertently, makes the user know themselves better.

Online Privacy vs Targeted Advertising

Today’s focus will be touch on online behavior.  This first article is about finding the delicate balance between maintaining online privacy versus targeted advertising.  Online users on one hand want to connect with their family, friends and colleagues, but on the other hand, want some privacy.  Advertisers try to track the user’s online behavior by tracking their website visits, purchases, freeware, and email.  If all these inputs are being monitored it almost becomes Big Brother-like behavior.  By targeting the user more effectively,  ads become increasingly relevant to the consumer and also increases the ROI for the advertiser.  Much of Google’s revenue is from selling contextually relevant ads, as they strive to find increasingly more effective methods to target consumers. 

Recently, Facebook launched an advertising program called Beacon, which tracks user purchases with Facebook-affiliated vendor sites and shares this with the user friends.   Could the purchase of a certain product be a conversation piece for the user with his/her friends?  Or is it an intrusion of privacy to the user?  It has caused much controversy.  Again, in the pursuit of contextually relevant advertising, many people feel that it has crossed the line with respecting online privacy. 

The effect on privacy will be felt by current generation of users (high school, college and young professional users).  In the past, most activities and experiences with family, friends and colleagues were not broadcast around the world.  How will the greater transparency of social behaviors have on the current generation?  Only time will tell.  Are people opening themselves up too much?