CourseNoteTopic11

Social Networks and Industry Disruptors in the Web 2.0 Environment

Learning Objectives Upon completion of this chapter, you will be able to: 1. Understand the Web 2.0 revolution, social and business networks, and industry and market disruptors. 2. Understand the concept, structure, types, and issues of virtual communities. 3. Understand social networks and describe MySpace, Flickr, Facebook, Cyworld, and similar sites. 4. Understand person-to-person video sharing and describe YouTube and its competitors. 5. Describe business networks. 6. Describe how the entertainment industry operates in the Web 2.0 environment. 7. Describe some of the enablers of the Web 2.0 revolution. 8. Understand the relationship between Web 2.0 and e-commerce. 9. Describe Web 3.0. Content Wikipedia and Its Problems of Content Quality and Privacy Protection 8.1 The Web 2.0 Revolution, Social Networks, Innovations, Media, and Industry Disruptors 8.2 Virtual Communities 8.3 Online Social Networks 8.4 YouTube and CompanyA Whole New World 8.5 Business and Entrepreneurial Networks 8.6 Entertainment Web 2.0 Style: From Communities to Entertainment Marketplaces 8.7 Technology Support: From Blogger.com to Infrastructure Services 8.8 Web 2.0, Social Networks, and E-Commerce 8.9 The Future: Web 3.0 Managerial Issues Real-World Case: Web 2.0 at Eastern Mountain Sports Answers to Pause/Break Section Review Questions Section 8.1 Review Questions 1. Define Web 2.0. The popular term for advanced Internet technology and applications, including blogs, wikis, RSS, and social bookmarking. 2. List the major characteristics of Web 2.0.

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See page 311. 3. List the Web 2.0 technologies. Some examples include lightweight programming languages that can be executed in the browser (JavaScript), on the server (ASP, PHP) or on the client (java) that may have a rich GUI (Ajax). 4. Define social media. Online platforms and tools that people use to share opinions and experiences, including photos, videos, music, insights, and perceptions. 6. Define disruptors. Companies that introduce significant changes in their industries.

Section 8.2 Review Questions 1. Define virtual (Internet) communities and describe their characteristics. A group of people with similar interests who interact with one another using the Internet. Characteristics are described in Exhibit 8.3. 2. List the major categories of virtual communities. There are several categories including: Associations Ethnic communities Gender communities Affinity portals Catering to young people Megacommunities B2B online communities Social networks 3. Describe the commercial aspects of virtual communities. Virtual communities can be used to support an existing firm, or the community itself can be commercial. 4. Describe the critical success factors for virtual communities.

Duffy (1999) lists the following: 1. Increase traffic and participation in the community. 2. Focus on the needs of the members; use facilitators and coordinators. 3. Encourage free sharing of opinions and informationno controls. 4. Obtain financial sponsorship. This factor is a must. Significant investment is required. 5. Consider the cultural environment. 6. Provide several tools and activities for member use; communities are not just discussion groups. 7. Involve community members in activities and recruiting. 8. Guide discussions, provoke controversy, and raise sticky issues. This keeps interest high. Section 8.3 Review Questions 1. Define social network. A special structure composed of individuals (or organizations) that is based on how its members are connected through various social familiarities. 2. Define social network analysis and services. The mapping and measuring of relationships and flows between people, groups, organizations, animals, computers, or other information or knowledge processing entities. 3. Describe Flickr, Facebook, Classmates, and Friendster. Each of these sites are social networking sites that provide a suite of tools to users that allows them to more easily interact online with other individuals with similar interests. 4. Describe Digg. Digg is a community-based, user driven listing of popular web-based articles, websites and multimedia. 5. What is Cyworld? Cyworld is a Korean social networking site similar to MySpace or Facebook. Section 8.4 Review Questions 1. Define video sharing and describe how it is done at YouTube.

4 Video sharing is user-uploaded video content to a publicly available system. YouTube allows users to upload video for all users to match and rate. 2. What can people do on YouTube? Users can: Upload, tag, and share videos worldwide Browse millions of original videos uploaded by community members Find, join, and create video groups to connect with people who have similar interests Customize the experience by subscribing to member videos, saving favorites, and creating play lists Integrate YouTube videos on Web sites using video embeds or APIs Elect to broadcast their videos publicly or share them privately with specified friends and family upon upload 3. How can YouTube create Internet celebrities? YouTube creates Internet celebrities by allowing anyone to upload content. This content is then judged by the group. 4. How can YouTube promote music and artists? Content creators can gain exposure through the large user base of YouTube. 5. What are YouTubes revenue sources? How are these revenue models related to Google? The site uses advertisements. YouTube is now owned by Google who manages these ads.

Section 8.5 Review Questions 1. Define business network. A group of people that have some kind of commercial relationship; for example, the relationships between sellers and buyers, buyers among themselves, buyers and suppliers, and colleagues and other colleagues. 2. Describe LinkedIn and its capabilities. LinkedIn acts as a contact management system that is also used for trusted referrals. 3. What is an entrepreneurial network?

5 Social organizations that offer resources to start or improve entrepreneurial projects or startups. 4. What is a social marketplace? An online community that harnesses the power of social networks for the introduction, buying, and selling of products, services, and resources, including peoples own creations. Section 8.6 Review Questions 1. Define entertainment communities and provide an example. Entertainment communities are social communities focused on individual entertainment. An example is last.fm. 2. Describe online marketplaces for music. The online marketplace for music includes a variety of pay for use, pay for download and free sites for individuals to obtain or sample music. 3. What is an entertainment series? This is a series of media (like soap operas on TV) available online. 4. Describe the iPhone. The iPhone is an all-in-one smartphone from Apple. The iPhone acts as a cellular phone, media player, web browser and more. 5. What is unique to the Nokia N800 Internet Tablet? Student perceptions will vary but may focus on the screen-based keyboard. Section 8.7 Review Questions 1. Describe some tools for blogging and wikis. There are a large number of blogging tools that changes often. Current tools can be found at problogger.com. 2. Define social software and list some examples. Social software enables people to rendezvous, connect, and collaborate through computermediated communication. See Exhibit 8.5.

6 3. What is social bookmarking? Web service for sharing Internet bookmarks. The sites are a popular way to store, classify, share, and search links through the practice of folksonomy techniques on the Internet and intranets. 4. Describe suites of Web 2.0 tools and the integration of tools. There are several suites of tools available that allow for the creation of Web 2.0 sites. Some of these tools are for development (Flash) while others support the integration of different systems. 5. Describe the need for IT infrastructure in regard to the Web 2.0 revolution. Most issues relate to the speed of the applications (servers) and the speed of transmission (bandwidth). 6. Describe the future direction of Web 2.0 software. Student perceptions will vary, but could focus on the growth of services, acceptance of standards and companies embracing the services. Section 8.8 Review Questions 1. Why is there so much interest in EC via social communities? The growth of social communities provides both a market and feedback mechanism. 2. How can a social network facilitate viral marketing? Social networks can create word-of-mouth marketing with very little input from the service or products owner. 3. Why is there so much interest in classifieds on social networks? Student perceptions will vary, but it appears that it is a process well-suited to available technologies that can increase commerce. 4. How can social networks support shopping? Social networks can provide advertising, product information and reviews of products. 5. How is customer feedback solicited in social networks? It can be generated based on individual desire, requests from other individuals or company requests.

Section 8.9 Review Questions 1. Describe nontechnological EC trends. (Hint: see Online File W8.7) Student responses will vary based on current events. Examples could include increased use and acceptance as well as increase customer savvy. 2. Describe technological trends for EC. (Hint: see Online File W8.8) Student responses will vary based on current events. Examples could include greater use of rich GUIs as bandwidth improves, and better integration between services. 3. What is Web 3.0, and how will it differ from Web 2.0? Web 3.0 will be the convergence of Web 2.0 and business applications. 5. Describe the future of mobile social networks. The growth of social networks will increase as they move from PCs to mobile devices. 6. List the major potential inhibitors of e-commerce and Web 2.0. Inhibitors include: Security concerns Lack of Net Neutrality Copyright issues Connectivity issues

Answers to EC Application Case Questions EC Application Case 8.1: HOW YOUTUBE CAPITALIZES ON MAJOR EVENTS AND COMMERCIAL VIDEOS 1. How does the Sundance Channel benefit from its relationship with YouTube? Sundance benefits from greater awareness and interest. This is a Web 2.0 application due to the nature of the tools used and its social network aspects. 2. How did Coca-Cola benefit from YouTubes greeting card program? It allowed users to create video messages using content mashups. It raised brand awareness for Coca-Cola.

3. YouTube collects money from its partners. Why are the partners willing to pay? They parties see it as an advertising method. EC Application Case 8.2: REVENUE SOURCES AT YOUTUBE 1. List the different advertising models on YouTube. Examples include text ads, in-video ads, and fees for brand-based content. 2. List the critical success factors from these cases. Factors include the size of the user base, the ability to market to specific groups and the social networks involved. 3. How do advertisers benefit from YouTube? They are able to tap the customers using the system and target advertising.

Answers to Discussion Questions 1. Discuss the differences between Web 2.0 and the traditional Web. The traditional web is organized around pages, software, technology, and corporations, while Web 2.0 is organized around ordinary people and services. 2. Discuss the major characteristics of Web 2.0. What are some of its major advantages? The following are representative characteristics (OReilly 2005): The ability to tap into the collective intelligence of users. The more users contribute, the more popular and valuable a Web 2.0 site becomes. Making data available in new or never-intended ways. Web 2.0 data can be remixed or mashed up, often through Web-service interfaces, much the way a dance-club DJ mixes music. The presence of lightweight programming techniques and tools that lets nearly anyone act as a developer. The virtual elimination of software-upgrade cycles makes everything a perpetual beta, or work in progress, and allows rapid prototyping using the Web as a platform. Networks as platforms, delivering and allowing users to use applications entirely through a browser. Users own the data on the site and exercise control over that data.

9 An architecture of participation and digital democracy encourages users to add value to the application as they use it. New business models are created (Chesbrough 2006). A major emphasis on social networks.

3. Discuss the relationship between virtual communities and doing business on the Internet. By tapping into the self-selected attributes of virtual communities, advertisers can be very specific in market targeting. 4. Discuss why Cyworld may take over members from other sites. Student responses will vary based on their perceptions of Cyworld features compared to those of Facebook or MySpace. 5. Discuss why a social marketplace is a Web 2.0 instrument. By definition Web 2.0 is based largely on online social networks. Social marketplaces are a subset of these online social networks. 6. What are the advantages and disadvantages of social bookmarking? Student perceptions will vary but may be based on the benefits and disadvantages of relying on others as a source of information or rankings. 7. Discuss the infrastructure required for Web 2.0 services and tools. Because of the volume of traffic and rich user interfaces, Web 2.0 applications generally require more computing power and bandwidth. 8. What are the benefits of conversational marketing? Consumers may not perceive it as negatively as traditional marketing and are more apt to consider the message. 9. Discuss the nature of industry disrupters. Disruptors are companies that introduce significant changes in their industries.