Methods Used by Social Networking Sites for Profits

The social networking site is the online platform that people utilize for building the social relations with various other people, who are sharing similar personal interests, backgrounds and activities. The following research report outlines a brief discussion on the several methods that are utilized by the social networking sites for making profit within their business.

Running head: METHODS USED BY SOCIAL NETWORKS
Methods Social
Networking Sites
can Use to Make
Profits
Name of the Student
Name of the University
Author’s Note:

Student NameSubject Code Name
Table of Contents
Introduction...............................................................................................................................2
Discussion...................................................................................................................................2
Features of Social Networking Sites.......................................................................................2
Methods Used by Social Networking Sites for Profits...........................................................3
Conclusion..................................................................................................................................5
References..................................................................................................................................6
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Introduction
The social networking site is the online platform that people utilize for building the
social relations with various other people, who are sharing similar personal interests,
backgrounds and activities (Fox and Rooney 2015). The social networking sites eventually
vary in several number of features. These sites could incorporate the range of newer
communication tools and information. Moreover, they even feature the digitalized photos
or videos and even web logging. The sites of social networking also provide the space to
interact for continuing beyond the personal interactions. All of these interactions of the
computers could link each and every member for several networks and might be helping for
the maintenance as well as development of the new social networking sites (Miltsov 2017).
The following research report outlines a brief discussion on the several methods that are
utilized by the social networking sites for making profit within their business. There are
some of the most important and significant methods that are utilized by these networking
sites and all of them will be discussed here.
Discussion
Features of Social Networking Sites
Social networking sites allow the users to share the ideas and various other posts
and videos (Perrin 2015). There are various characteristics of the social networking services
and these are as follows:
i) Sharing of Content: The first and the foremost characteristic of the social
networking site is that it helps in sharing the user generated contents like the posts, videos
and photos, which could inform the other users regarding the interests as well as activities
of the sender (Tsai and Men 2013).
ii) Connection through Online: The second important and significant characteristic of
these social networking sites is that it enables a proper connection through online services.
The individuals could connect with one another from any part of the world, by utilizing some
of the most significant platforms.
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iii) Completely Free of Costs: The next vital and noteworthy characteristic of these
types of sites is that it does not incur huge costs (Fox and Moreland 2015). The business
model is on the basis of memberships and hence, the usage charges are counterproductive
in nature. There is a high possibility that the network could grow larger and become quite
useful by charging only a little fee.
iv) Finding Information: Another important or vital characteristic of the social
networking sites is that it helps to find relevant and suitable information and data (Lin, Fan
and Chau 2014). Moreover, the products and services are also shared within the social
networking sites.
Methods Used by Social Networking Sites for Profits
The social networking sites utilize some of the most significant methods for making
their profits (Luo and Zhong 2015). These specific methods are as follows:
i) Funding from Venture Capital: The first and the foremost method that is utilized
by the several social networking sites for making profit within their businesses is by funding
from venture capitals (Pai and Arnott 2013). Most of the social networking sites start their
business with the funding from the respective venture capitalists. The several investors
eventually take the risks on the organization, when they think it could be extremely
profitable in future. As a result, these investors invest early and then hope for the huge
profits down the business. The popular examples of social networking sites are Facebook
and Twitter. Both of them have raised several million dollars within venture capital and
hence profit is obtained by them (Maier et al. 2015). They monetize the business and even
sell it to the larger corporation for better profit.
ii) Advertising as well as E Commerce: The second important and significant method,
which could be utilized by various social networking sites to make profit in the businesses is
by the help of advertising and the electronic commerce (Jelenchick, Eickhoff and Moreno
2013). The advertising is considered as one of the most effective and efficient method that
could be helpful for the social networking sites to make money. The social networking sites
have millions of users and hence advertising is extremely easier for them. They could easily
generate their revenue by allowing the companies to advertise on their networking sites.
Web advertising is considered one of the most efficient emerging market and thus because
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of these millions of users over the social networking sites; advertisers have the will for
paying more money for the advertisements (Salehan and Negahban 2013). The major
example of this particular method is Twitter. They have recently organized the developer
conference, known as Chirp. During this conference, various methods were being discussed
for monetizing the website and harnessing the power of advertisements. They have decided
that as the users are already using the social networking site for getting the product
recommendations and the organizations are already using them for the proper promotion of
their products; the customers might be buying the products directly from Twitter via
electronic commerce (Oh, Ozkaya and LaRose 2014).
iii) Offering Premium Options: Another important and significant method that is
utilized by the several social networking sites for making more profit is by offering the
premium options. Some of the social networking sites are absolutely free of cost and the
other social networking sites offer a specific premium option for the users for the core
purpose of earning money (Fox and Moreland 2015). The example of this particular method
is LinkedIn, which comprise of the premium package for any type of job seeker. Each and
every option of networking is completely free in LinkedIn; however, if the user wishes to
have some specialized privileges, they would have to sign up for any of the premium
options. The second example of this particular method is Ning, which undertook recently.
Although, this social networking site of Ning comprise of millions and billions of users, they
have recently announced for suspending their each and every free service (Lin, Fan and
Chau 2014). This is mainly because of the fact that they have decided for making profits.
Ning has taken the decision to concentrate majorly on the premium model they have.
Moreover, they were even forced for cutting some of the most significant and important
jobs of the employees. Hence, it helps in depicting the fact that it is extremely difficult for all
the social networking sites to monetize their services of social networking (Pai and Arnott
2013). For the several social networking sites, which are incorporating the various services
and applications within the community, the developer fee could be helpful for generating
the revenue easily and promptly and without any type of complexities.
iv) Creative Products as well as Promotions: The fourth subsequent vital and
noteworthy method that is being utilized by some of the most popular social networking
sites to make the profits in their businesses is by simply providing the creative and
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innovative products as well as promotions (Jelenchick, Eickhoff and Moreno 2013). Since,
there is an extreme difficulty to monetize the social networking, the significant websites are
forced for coming up with several creative and innovative methods for earning or even
increasing the revenue. The most significant example of this type of method to make profit
used by the social networking site is Facebook Gifts. This particular social networking site of
Facebook has launched this technique to gain profit from their business (Salehan and
Negahban 2013). The facility of the Facebook Gifts eventually enable the users for sending
virtual gifts to the other users like his friends, family members, colleagues, which are
appearing on the profile of the recipient. This type of gifts is sent to the recipients profile as
soon as it is being shared and hence this has become extremely popular amongst the users
in the entire world. The expense of this type of gift of Facebook is only 1 dollar and the user
could even add any personal message to this gift (Tsai and Men 2013). Although, Facebook
is a free social networking platform, this particular option of gifts is bringing major profits
within their business and hence they are benefitted by these.
Conclusion
Therefore, from the above discussion, it can be concluded that the social networking
sites subsequently allow the users to share their ideas, digitalized photos, videos as well as
posts. Moreover, it even allows for informing other people regarding the online and real
world events or activities within the network. The social networking sites are completely
dependent on the social media platforms and the members have the ability of contacting
with all other members. The most popular and significant social networking sites are
Facebook, Twitter, LinkedIn and many more. The major types of the social networking sites
comprise of the several services. The main types of the social networking services are
socializing with peers, colleagues, utilized for the non-social interpersonal communications
and social navigation for finding the information and resources. The individual centred
services are provided by the social network services and the group centred services are
provided by the online community service. These social networking sites could facilitate the
network building for the core purpose of exchanging the several types of content online.
The above research report has clearly demonstrated the methods used for making profits.
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References
Fox, J. and Moreland, J.J., 2015. The dark side of social networking sites: An exploration of
the relational and psychological stressors associated with Facebook use and
affordances. Computers in Human Behavior, 45, pp.168-176.
Fox, J. and Rooney, M.C., 2015. The Dark Triad and trait self-objectification as predictors of
men’s use and self-presentation behaviors on social networking sites. Personality and
Individual Differences, 76, pp.161-165.
Jelenchick, L.A., Eickhoff, J.C. and Moreno, M.A., 2013. “Facebook depression?” Social
networking site use and depression in older adolescents. Journal of Adolescent
Health, 52(1), pp.128-130.
Lin, H., Fan, W. and Chau, P.Y., 2014. Determinants of users’ continuance of social
networking sites: A self-regulation perspective. Information & Management, 51(5), pp.595-
603.
Luo, Q. and Zhong, D., 2015. Using social network analysis to explain communication
characteristics of travel-related electronic word-of-mouth on social networking
sites. Tourism Management, 46, pp.274-282.
Maier, C., Laumer, S., Eckhardt, A. and Weitzel, T., 2015. Giving too much social support:
social overload on social networking sites. European Journal of Information Systems, 24(5),
pp.447-464.
Miltsov, A., 2017. Social Networking Sites. The Wiley Blackwell Encyclopedia of Social‐
Theory, pp.1-2.
Oh, H.J., Ozkaya, E. and LaRose, R., 2014. How does online social networking enhance life
satisfaction? The relationships among online supportive interaction, affect, perceived social
support, sense of community, and life satisfaction. Computers in Human Behavior, 30,
pp.69-78.
Pai, P. and Arnott, D.C., 2013. User adoption of social networking sites: Eliciting uses and
gratifications through a means–end approach. Computers in Human Behavior, 29(3),
pp.1039-1053.
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Perrin, A., 2015. Social media usage. Pew research center, pp.52-68.
Salehan, M. and Negahban, A., 2013. Social networking on smartphones: When mobile
phones become addictive. Computers in Human Behavior, 29(6), pp.2632-2639.
Tsai, W.H.S. and Men, L.R., 2013. Motivations and antecedents of consumer engagement
with brand pages on social networking sites. Journal of Interactive Advertising, 13(2), pp.76-
87.
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