Please enable JavaScript.
Coggle requires JavaScript to display documents.
Chapter 7 Virtual Communities (Revenue models for social networking sites…
Chapter 7
Virtual Communities
Virtual community
Social networking emerges
Social networking sites
Six degrees (1997)
Friendster(2002)
LinkedIn
Tribe.net
Youtube
MySpace
Twitter
Google+
Web logs
(Blogs)
Web sites containing individual commentary
on current events or specific issues
Retailers embracing blogs
Way to engage visitors not ready to buy from sites
Business
uses
Participatory journalism
newspapers
CNN
Idea based
social networking
Idea-based virtual communities
Idea-based networking
Social shopping
Virtual learning
networks
Bulletin boards, chat rooms
Moodles and uPortal
Open source software
Revenue models for
social networking sites
Advertising-supported
social networking sites
Rough measure of stickiness
Sites with higher number of visitors
can change more
Smaller sites with specialized appeal
Online Auctions & Related Businesses (cont.)
Specialty consumer auctions
example : JustBeads.com, Cigarbid.com, Winebid.com
Create specialized Web auction sites
Identify special-interest market targets
Consumer reverse auctions
Reverse Bids
example : Priceline.com (these types of sites now closed)
Buyer accepts lowest offer and offer best matching buyer's criteria
Site routes visitor to participating merchants
Visitor describes desired items or services
Group shopping sites
Seller posts item with tentative price
Individual buyers enter bids
known as
group purchasing site
Posted price decreases
Result : buyers force seller to reduce price
Successful sites: Groupon, LivingSocial, Gilt
well-suited product types
branded product, well-established reputations (produces buyer confidence of good bargain)
High value-to-size ratio, non-perishable
Disadvantages
Difficulty attracting sellers' interest
Well-suited companies
Business-to-business auctions
two methods
Liquidation specialist: find buyers for unusable items
Liquidation brokers: firms that finds buyers for items
Online auctions
Logical extension of these inventory liquidation activities to a new and more efficient channel (internet)
Emerging business-to-business Web auction models
Large-company model: creates own auction site
Small-company model: uses third-party Web auction site instead of liquidation broker
Both are direct decendants of traditional methods
Third emerging business-to-business Web auction model
new business entity creates a site where buyers and sellers can participate in auctions
Resembles consumer online auctions
Example: hospitals using online auctions to fill temporary employment openings
Business-to-business reverse auctions
Example: Owens Corning purchases
Advantage
Useful for nonstrategic commodity items with established quality standards
Example: Agilent, Bechtel, Boeing
Disadvantages
Suppliers compete on price alone
Cut comers on quality or miss scheduled delivery dates
Companies opting out
Suppliers do not participate if it impossible to conduct reverse auctions
Provide efficient way to conduct, manage price bidding if the competition high among suppliers
Characteristics (based on slides 67)
Auction-Related Services
Auction consignment services
Take item and create online auction for that item
Handle transaction
Remit proceeds balance (after deducting fee)
Auction software
Example: AuctionHawk & Vendio
Seller management software and services
Automate tasks
Create attractive page layouts
Manage hundreds of auctions
Snipping software
Observes auction progress until last second
Auction expires: places bid high enough to win
Snipe: act of placing winning bid at the last second
Almost always wins out over human bidder
Companies offer sniping service
sniping software runs on company Web site
Customer enters instructions on site
company may offer subscriptions
company may offer mixed-revenue model
Auction directory & information services
AuctionBytes
Publishes e-mail newsletter
Online auction industry articles
Price Watch
Advertiser-supported site
Advertisers post current selling prices
Computer hardware, software, electronics
Escrow services
Buyers' common concern: seller reliability (Buyers protect interests in high-value items)
Independent party holds payment until buyer receives item & buyer satisfied item is as expected
May take delivery of item from seller
Charge fees depends of the % of item's cost, to min fee
Revenue models for social networking sites
Advertising-supported
Social networking sites
High visitor counts
Mixed-revenue and free-for sservice
Most used advertising
Monetizing,concern: visitor backlash
Free based
Google answers site
Similar free services
Microlending sites
Function: clearing houses for microlending activities
examples : Kiva and MicroPlace
Internal Social Working
Save money
Mobile Apps
Physician using smart phone
Mobile phone for online banking
Recap from chapter 6
Companies moving to mobile commerce
Apps/tools
Mobile Operating System
Smart phonne example : Apple Iphone, Blackberry, Samsung
Wireless application protocol (WAP)
Allow Web pages to be formatted in HTML to be displayed on small-screen devices
Mobile commerce browser display option
Short messaging services (SMS)
Online Auctions
Selling advertising
Charging both buyers and sellers to participate
Bring together geographically dispersed people sharing narrow interests
Auction Basics
English auctions
Item sold to highest bidder (at bidder's price)
Open auction (open-outcry auction)
Minimum bid
Reserve price (reserve)
Yankee auction
Dutch auctions
Common implementation
Often better for the seller
Quickly move large numbers of commodity items
Winner's curse
First-price sealed-bid auctions
Sealed-bid auctions
Second-price sealed-bid auction
Open-outcry double auctions
Double auctions
Reverse (seller-bid) auction
Online Auctions and Related Business
General consumer auctions
eBay: registration required, seller fees, rating system
Seller risk
Buyer risk
Proxy bid
Bidder specifies
May cause bidding to rise rapidly
eBay stores
Integrated into auction site
Sellers generate additional profits
Competition in general consumer auctions
Yahoo! Auction operation closed in 2007
Amazon.com with "Auctions Guarantee"
Future challengers to eBay
Must overcome lock-in effect
Example: eBay maintains low market share (less than 3%)
Online auction business: rapidly changing
Business-to-consumer
Consumer-to-consumer
Consumer-to-business
Specialty consumer auctions
No need to compete with eBay
Consumer reverse auctions
Reverse bid
All these types of sites now closed
Birds
Bidders
Private
Private valuations
Auctioneer
Shill bidders