Social Networking sites and how they make money

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Rachid Ben hoummada Pavel Orlov Annita Tatiane T D Stefanie Triebelnig Jennifer Wimmer

The Team

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What is all the buzz about the Social Networking? (Video)

Price of Social Networking Sites

Facebook – behind the scenes StudiVz Vkontakte MySpace

Conclusion

Overview

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A few seconds, please…

What is all the buzz about the Social Networking?

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Any idea?

Price tag

$15,000,000,000

$20,000,000,000

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How do we know?

Number of users User value Price tag

©techcrunch.com

Behind the scenes

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Founded: 2004 in Massachusettes

Founder: Mark Zuckerberg Headquarters : Palo Alto, CA Revenue: 300 million USD (2008) Employees: 700 Users: > 200 million

General info

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Financial Data

2004: USD 500 000 from Peter Thiel 2005: USD 40.2 million from Accel and

Greylock 2006: Yahoo purchase? 2007: Microsoft ,1.6 % share for USD

240 Investment of USD 60 million

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Financial Data

• 2008: USD 100 million Triple Point value between USD 3.75 and 5 billion

• Today: USD 440 million in total debt and equity financing

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How do they make money?

Investments Sponsored Groups Advertising

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Advertising

Create your own Ad! Page, Application, Group or Event New Ad placement People targeted – Filter system

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Advertising

• Target your audience - location, age, sex, education, workplace, relationship

interests…

• Pricing:- Minimum : 1USD per day, define maximum

• Campaign• Payment method

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Fraud Cases 2007 – Connect U claimed FB Online scams Users Report abuse

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Privacy Issues

2007: Code to generate FB page was made public

Students downloaded 70.000 profiles Sell users data Difficulties deleting the account Pro-mafia Group case

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Privacy Issues

Recent Issues:

Changes to site Phishing Attack

– Bist du schon drin?

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General Information

Based in Berlin, Germany

One of the biggest Social Networks in Europe

10 million members

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Differences to Facebook

View of the full profile

Linking permission

People visiting your site

Groups, videos, audio data …..

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Financial data

60.000 to 100.000 Euros a month

Spreadshirt

Samwer

Holtzbrinck

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How do they raise revenue?

Google Ads

Traffic sharing

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What kind of advertisements do they have?

Telegram

News-Teaser

Brand community

Display Ads

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How much is an ad on StudiVz?

Where do you want to put your ad?

What kind of ad?

Minimum booking budget 2.500

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Privacy issues

Missing protection

No guarantee of misusage

New accusations - images in StudiVZ

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Fraud

Copying of the layout and design of Facebook

Bluff users

Not allowed to register of commercial purposes

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Deletion of the Profile

1. Log on

2. select “mein account“

3. “mein account löschen”

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MySpace

a place for friends

How to delete an account on MySpace.com

http://home.myspace.com/index.cfm?fuseaction=user

How does MySpace.com rise revenue? Advertising (with the MySpace, myAds

tool) Stock market Parents company the News corp. (.03

cents per monthly page view) MySpace users (Points 3.fees and 8.18 of

the policy) MySpace credit card in partnership with

the CITI Bank

Advertising on MySpace, MyAds: how much does it cost?• MySpace MyAds accepts only Visa, MasterCard and

American Express cards• 1st user get a limit of $25, $25 to check the validity of

the card used• the credit limit is raised in increments each time the

account costs hits your credit limit, and the user makes a successful payment at that level

• The initial credit limit of $25 is first raised to $50, then to $100, then to $250, then to $500, and then to the final amount of $1,000

• The customer is billed after he/she accrued costs for his/her advertising activity.

• Credit card billed after 30days and the cycle restart

Promoting themselves "word of mouth advertising” media (TV, Radio, Newspaper, Journals,

buses, train...)

Privacy issues and general problems of MySpace.com 2006: PERP problem 2005: big problem within its organization

members (News Corp./Myspace transaction bilked shareholders out of tens of billions of dollars)

Other social networking coming up Partnership with Google for the “Friend

connect”: contract ending in year 2009

In case of problem in MySpace.com Contact the website USA Legislation taken into account

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- KGB pet?

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Wealthy owners No advertisements until recently

The purpose is unknown

Do they need revenue?

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Precise targeting

Low cost – from €0,02 per click

Only for users

For companies – very expensive

Targeted advertisement

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Default privacy settings

Content – video, audio

More info about users

Not real time

Differences

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They earn a little They cost a lot

Is there something we don’t know?

Conclusion

Everybody involved –

what is your part?

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Thank you for attention

Please feel free to ask questions