ITSU1003 - Social Networking Sites: Strategies for Profitability

This report examines the methods social networking sites employ to generate profit. It begins by introducing social networking sites as platforms for building social relations and sharing interests. Key features include user-generated content sharing, online connectivity, cost-free access, and information retrieval. The report then details profit-making strategies such as securing funding from venture capital firms (exemplified by Facebook and Twitter), leveraging advertising and e-commerce (like Twitter's Chirp conference), offering premium options (as seen with LinkedIn's tiered services), and implementing creative products and promotions (such as Facebook Gifts). The report concludes by summarizing these methods and highlighting the core functionalities of social networking sites.

Methods used by Social
Networking Sites for
Making Profit
Name of the Student
Name of the University

Introduction
 Social Networking Sites are online platforms to
build social relations.
 The users can share their interests and activities
with other people through these sites (Fox and
Rooney 2015).
 Web logging is also possible with social
networking sites.
 Various methods are present that help these sites
to make profit.

Features of Social Networking Sites
There are several important and significant features
of the social networking sites. These are as follows:
 Sharing of User Generated Content: Posts,
videos and photos are shared by users.
 Connection through Online: A proper
connection is established through these online
services.

Features of Social Networking Sites
Contd…
 Completely Free of Costs: Most of the social
networking sites do not incur any cost.
 Helps in Finding Suitable Information: Social
networking sites also help in finding suitable and
relevant information (Lin, Fan and Chau 2014).

Methods Used by Social Networking
Sites for Making Profit
The most important methods that are being utilized by
the social networking sites for making profit in
business are as follows:
 Funding from Venture Capital
 Advertising and E-Commerce
 Offering Premium Options
 Creative Products and Promotions.

Funding from Venture Capital
 It is one of the most effective method.
 The venture capitalists provide funds for these
businesses (Luo and Zhong 2015).
 The best examples are Facebook and Twitter to
have raise more than million dollars.
 These sites monetize the business and then sell to
the larger corporations.

Advertising and E-Commerce
 The revenue is easily generated by using
advertising and E-commerce.
 The advertisers have the will for paying more
money for the advertisements (Perrin 2015).
 Twitter have organized developer conference,
known as Chirp for including E-commerce within
their business.

Offering Premium Options
 This is the third method that is used by the social
networking sites to make profit.
 Some social networking sites offer a specific
premium option to earn money (Miltsov 2017).
 The example is LinkedIn, where the preliminary
services are free; however, specified privileges are
obtained by premium options.

Creative Products and Promotions
 Creative as well as innovate products and
promotions are provided by these.
 The revenue is increased and profit is earned.
 The most significant example is Facebook Gifts
(Oh, Ozkaya and LaRose 2014).
 It enables the users to send virtual gifts to the
other users.

Summary
 Social networking sites enable the users in sharing
ideas, digital photos, posts and photos.
 The major features of these social networking sites
include content sharing, proper connection through
online services, free of costs and also finding
information.
 The popular methods used by the social networking
sites to make profit are funding from venture capitals,
advertising and E-commerce, offering premium options
and finally creative products and promotions.

References
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.
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.
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.
Perrin, A., 2015. Social media usage. Pew research center, pp.52-68.