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

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Introduction <ul><li>Websites focused on building online communities of people having shared interests. </li></ul><ul><li>Social networks have common themes of information sharing, person-to-person interaction and creation of shared & collaborative content. </li></ul><ul><li>The industry has been successful in getting a large number of people at one place, but not very successful in monetization. </li></ul><ul><li>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. </li></ul>

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Some Statistics(2010) <ul><li>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 </li></ul><ul><li>The world now spends around 22 percent of all time online on social networks and blog sites </li></ul><ul><li>The average visitor spends 66% more time on these sites than a year ago </li></ul><ul><li>9 out of every 10 U.S. Internet user now visiting a social network in a month </li></ul><ul><li>CNN's international readership found that 43% of online news sharing occurs via social media networks and tools </li></ul><ul><li>The number of users registered for virtual world sites broke the 1 billion mark during 2010 </li></ul>

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

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

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Key Players <ul><li>Twitter </li></ul><ul><li>Founded: 2006 </li></ul><ul><li>No. of users: 1 90 million </li></ul><ul><li>Revenue: US $150 million (projected 2010) </li></ul><ul><li>Alexa Rank: 9 </li></ul><ul><li>Revenue from: verified accounts, advertisements (promoted trends) </li></ul>

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

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

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Key Players <ul><li>Orkut </li></ul><ul><li>Founded: 2004 </li></ul><ul><li>No. of users: 120 million </li></ul><ul><li>Alexa Rank: 106 </li></ul><ul><li>Revenue from: advertisements </li></ul>

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LifeCycle

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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

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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%

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Top Social Networking Sites (monthly visits)

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

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Social Networking sites for India

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Social Networking sites for India

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Social Networking sites for India

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Social Networking Activities

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

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External Environment Analysis

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

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

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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

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Facebook - SWOT Analysis

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Facebook - SWOT Analysis

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Long Term Objectives

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Recommendations

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Thank You!