Twitter's Revenue Plan

Check out this video about promotion on tweeter

For Discussion: Twitter!!!

Did you know that Twitter didn't have a revenue model up until recently when it launched "Promoted Tweets"? And did you know that Twitter still doesn't have a business model?

For Discussion: Web 2.0 Companies Making Big Money

There are web 2.0 companies that are making good money with use of their business mo

del as well as their revenue model. These companies are not as flashy or as popular as Skype, Facebook, My Space or Twitter and they do not grow like mushrooms either. These companies serve corporate social application needs. They saw that there was a market in corporate social networks and they took full advantage of that.

According to Bernoff (2008), these companies are not your typical Web 2.0 business paradigm, since serving corporate customers means lots of client service, which is people-intensive.

These companies do not lift off miraculously like a pure technology startup. In fact, in many of these companies, the technology itself is positively ordinary. But the startups grow because they deliver value for which they can charge a premium and get customer loyalty. The customers of these companies do not defect when something shiny and new comes along, because they like the service that they are getting. Unlike Facebook or Twitter, customers can just decided to close their accounts when something else better comes along just like they did with Myspace when Facebook came along and some even defected when Twitter came along.

Reference

Bernoff, J, 2008, The Real Business Model for Web 2.0: Corporate Clients, viewed on 30^th of September 2010,

http://forrester.typepad.com/groundswell/2008/06/why-id-bet-on-w.html

For Discussion: Social Networks and their Lack of a Good Revenue Model

Looking at Facebook and Twitter, some of us can only assume that they are making a huge profit. This assumption is taken by looking at the amount of people that use Facebook or Twitter, the number of businesses that have taken an interest in these social networks. However it is a major surprise when we discover that the hottest Web 2.0 startups are in fact unprofitable however it becomes not much of a surprise when you discover that they lack viable revenue models for them to be profitable.

Twitter for example has managed to capture the web 2.0 community but however it has failed to make any real profit due to the lack of a revenue model. Social networks such as Twitter all share a common trait which is that none of them has developed a self-sustaining business whose financial future seems assured.

AdSense has been the main source of revenue for many of the Web 2.0 companies. AdSense is a program by Google which pays web 2.0 companies in order to advertise on their sites. However this does not necessarily mean that the amount made from AdSense will be great to account to the company’s profit. If every new social network company formed relies on AdSense as a source of its revenue, is there enough money to feed all of them? Definitely not, these web 2.0 companies need to find other sources of revenue other than AdSense.

Popular Web 2.0 companies such as Facebook and Twitter have not been cheap to operate or to grow which is why they need a solid revenue model in order to survive in the Web 2.0 market. With a revenue model they will be able to sustain their revenue source.

According to Green (2006), the biggest problem with web 2.0 companies it they put too much weight on the free and not enough on the premium side of the business. They cannot make a profit by pay too much attention on the free side of the business. However free products or services will definitely attract more traffic to your site however there is still the matter at hand, which is, your company needs to make a capital for itself. Therefore by charging for some things, this will give it the capital it needs. Green (2006) says that the trick is o launch a low free level to start with, that has unique applications and that are also addictive to the audience, then the premium side of the business should have room to support the free side.

According to Drama 2.0 (2009 web 2.0′s biggest stars in the past had opted to put revenue models on the back burner. Instead, they raised large amounts of capital for the purpose of growth and achieving critical mass. However things have changed, as they have seen that revenue is required for them to survive and that they cannot just simply rely on their investors when they themselves are not making any money. Twitter was established in 2006 according to Strickland (2010) and it is only now, four years later that they have decided to come up with a revenue model.

Now according to Miller (2010), Twitter has come up with a revenue model which will make use of advertising. Miller (2010) states that twitter will sale keywords to advertisers which they will them to their ads and they will show up when the twitter user searches for these keywords. Twitter will call this program “Promoted Tweets”.
Miller (2010) says in he next phase of Twitter’s revenue plan, it will show promoted posts in a user’s Twitter stream, even if a user did not perform a search and does not follow the advertiser.

According to Miller (2010), several companies including Best Buy, Virgin America, Starbucks and Bravo will run their ads on Twitter. Therefore Twitter will be making a profit from both brick and mortar as well as click companies.
In addition to this revenue, Miller (2010) states that Twitter already has some revenue from deals to license its stream of posts to Google, Microsoft and Yahoo.

References:

Drama 2.0, 2009, Web 2.0, Revenue Models and Profitability: A Web 1.0 Comparisonhttp, viewed on 29 September 2010, //www.centernetworks.com/web-2-revenue-models

Green, H, 2006, Web 2.0 Companies Making Money? viewed on 28th September 2010,
http://www.businessweek.com/the_thread/blogspotting/archives/2006/04/web_20_companie.html

Miller, C, C, 2010, Twitter Unveils Plans to Draw Money From Ads, viewed on 27th September 2010, http://www.nytimes.com/2010/04/13/technology/internet/13twitter.html

Strickland, J, 2010, How Twitter Works, viewed on 29th September 2010, http://computer.howstuffworks.com/internet/social-networking/networks/twitter.htm

Main objectives of our research

Objectives:

1. We introduce the term "Web 2.0" and list up everything to know about it.
2. Next we examine Web 2.0's various business models.
3. Lastly we bring up the controversial topic of profitability of Web 2.0 models.

Web 2.0 Business Models

According to Yarmosh (2005), there are mainly two Web 2.0 business models. Namely technology focus and network effect focus. The two models are said to be both closely related and in some ways, rely on the other for true success.

Yarmosh (2005) also states that the technology focus model is based on innovation which offers a unique value proposition. And that t is important to observe that in certain cases of the technology business model, such as Skype, network effects help drive both the adoption and value of the service.

The technology focus model, also enable the possibilities for partnerships. Where a web 2.0 click company will partner with a brick and mortar company to make a profit, for example FeedBurner can use their technology to help manage content delivery for newspapers.

Secondly Yarmosh (2005) states that the network effects business model is mainly based on user base and user interaction but however technology is key because it is used as an infrastructure tool but it is not the focus.

Reference:
Yarmosh, K, 2005, Web 2.0 Business Models, viewed on 27th September 2010,

http://kenyarmosh.com/web-20-business-models/

Here is a further and simpler explanation of web 2.0.

For Discussion: What is Web 2.0?

Overview

The term Web 2.0 is associated with web applications that facilitate interactive information sharing, user-centered design and collaboration on the World Wide Web. A Web 2.0 site gives its users the free choice to interact or collaborate with each other in a social media dialogue as creators in a virtual community, in contrast to websites where users (consumer) are limited to the passive viewing of content that was created for them. Examples of Web 2.0 include social networking sites (Facebook, Twitter), blogs (Blogspot), wiki (Wikipedia, WikiIndex), video-sharing sites (Youtube), hosted services and web applications.

A little History

The concept “Web 2.0” was started in a conference brainstorming session done by O’Reilly and MediaLive International in 2004. Although the term “Web 2.0” suggests a new version of using the World Wide Web, it doesn’t refer to any technical update specification but rather just a new way of approach to the softwares and applications on the web.

Early Brainstorming

In O’Reilly’s initial brainstorming, their sense of Web 2.0 was illustrated as:














If we suppose that Web 2.0 had a gravitational core, then you could visualize Web 2.0 as a set of theories and practices that ties together a solar system of sites that demonstrate some or all of those theories, at a varying distance from that core. The following brainstorming figure shows how the ideas could be radiated out from the core of Web 2.0.

















Characteristics

Web 2.0 websites allow users to do more than just retrieve information. By increasing what was already possible in “Web 1.0”, they provide the user with more user-interface, software and storage facilities, all through their browser. Users can provide the data that is on a Web 2.0 site and exercise some control over that data. These sites may have an "Architecture of participation" that encourages users to add value to the application as they use it.

Examples of Web 2.0 vs. “Web 1.0”

To have a better and clearer view on how Web 2.0 evolved, we should take a look at some early examples: Netscape vs. Google and Encyclopedia Britannica Online vs. Wikipedia. A while ago, O'Reilly contrasted Web 2.0 with what they called "Web 1.0". They associated Web 1.0 with the business models of Netscape and the Encyclopedia Britannica Online.

In short, Netscape focused on creating software, updating it on occasion, and distributing it to the end users. O'Reilly contrasted this with Google, a company which did not at the time focus on producing software, such as a browser, but instead focused on providing a service based on data such as the links Web page authors make between sites. Google exploits this user-generated content to offer Web search based on reputation through its "page rank" algorithm.

















Unlike software, which undergoes scheduled releases, such services are constantly updated, a process called "the perpetual beta". A similar difference can be seen between the Encyclopedia Britannica Online and Wikipedia: while the Britannica relies upon experts to create articles and releases them periodically in publications, Wikipedia relies on trust in anonymous users to constantly and quickly build content.

Technology

The web browser technologies typically used in Web 2.0 development are Asynchronous JavaScript and XML (Ajax), Adobe flash framework, and Javascript/Ajax frameworks such as Yahoo! UI Library, Dojo Toolkit, MooTools, and jQuery. Ajax programming uses JavaScript to upload and download new data from the web server without undergoing a full page reload.


Reference

O’Reilly, Tim, (2005), “What is Web 2.0?”, O’Reilly media,
http://oreilly.com/web2/archive/what-is-web-20.html

Web 2.0 Business Models and Profitability Issues

Introduction

It is safe to say that many of us have heard and been wondering about how people manage to earn as much as thousands of dollars on the internet using social networking. Celebrities such as Radiohead (Taulli 2007) have managed to earn a lot of profit through their fan page on social-networking sites like Facebook or Twitter. These people have successfully taken advantage of Web 2.0 business models. First of all what is web 2.0?

Background

Basically, web 2.0 can be defined as a term associated with web applications that facilitate interconnection, information sharing and collaboration on the web. An example of a web 2.0 application is Facebook, Blogs and so forth. Web 2.0 is the second generation of the web (World Wide Web); it is a movement away from a static webpage to dynamic and shareable content and social networking. The first generation is called ‘web 1.0’ which was simply just text-and-picture. Internet users now are free to choose to connect or interact with each other in a social media dialogue in a virtual community. Examples of Web 2.0 are social-networking sites, blogs, wikis or video-sharing communities (O’Reilly 2005).

Topic

We are going to do an in-depth research on the ways that people use to make money with the use of web 2.0 business models and thereafter relate it to e-Commerce to acquire expert knowledge on the matter. To investigate, an examination and analysis of the already existing business models such as Facebook will be taken. Secondly we will take a look at the profitability issues faced by web 2.0 business owners. In addition, we will look at some revenue models that some of these web 2.0 business owners that can take but are currently not using. Throughout the whole process, e-Commerce principles will be applied to analyse the business models of Web 2.0.

Discussion Question

Last but not least, we would like to have your opinions on this topic. Particularly, how do those social-networking sites make money and profit by providing free access to users funding only by advertising? Any input from you on the matter is very well appreciated by us.

Reference:

O’Reilly, Tim, (2005), “What is Web 2.0?”, O’Reilly media, viewed on 15th September 2010,

http://oreilly.com/web2/archive/what-is-web-20.html

Taulli, Tom, (2007), “Radiohead Web 2.0 acid trip”, BloggingStocks, viewed on 15th September 2010

http://www.bloggingstocks.com/2007/10/03/radioheads-web-2-0-acid-trip/

Hello everyone!

Hi everyone!! We are David and Sharon. We look forward to working with you guys this semester. But before we can do that. Here is a brief introduction. Sharon will go first:

SHARON
well my name is Sharon, I'm from Zambia which is a small country located in south east part of Africa. I have been in Malaysia for about 2 years now. I love eating out with my friends, and watch stupid and fun movies.

David
I am from Vietnam a rival of Malaysia in soccer. This is my last semester and I can't wait to finish. It's a pleasure to meet and make friends with you all.

Now that you know a little about us, Enjoy the blog!!!