Over the last ten years, there has been a boom in Social Online Communities (SOCs), such as Facebook, MySpace and LinkedIn to name a few. Many of these SOCs provide a free service in their fight to attract users and to become a big player in the market. Therefore, the users are getting used to the fact that online services are free. A lot of the big SOCs have been valued to many millions and even billions of dollars, even though most SOCs have problems making profit from their businesses. This issue has led to speculations about problems with creating real value in SOCs. The general research area for this master thesis is therefore twofold. How do SOCs create value, if at all? And how do SOCs monetize on the value? To answer these research questions, 20 popular SOCs have been studied as part of a multiple case study, and the data has been cross-analyzed according to known literature in the field of value creation and SOCs. The result shows that value for SOCs is created by the users. The fact that the users share details and other personal information about themselves and their lives in exchange for a service creates value for the SOCs. This information is of great value to the companies behind the SOCs as they can advertise and sell products to the users and have the ability to using data mining for other purposes. So how exactly is this done? The SOCs have to provide a range of features and use certain methods to attract the users and to keep them interested. The research shows that depending on which purpose the SOCs have, either a general like Facebook or a specialized like Flickr, and which market it is focused on, a global or local market, the features and methods are provided differently. All SOCs have to fulfill a need of the user while they provide a service that is personal, allow user participation, is plausible and is free in a basic version. But SOCs with a general purpose must also provide several complementary features whereas specialized SOCs must focus on a unique and innovative service. Likewise, SOCs on a local market can convert the virtual community into a physical state by making events and SOCs with a global market and a general purpose must provide everything free of change. More details on these differences are provided in the paper. This is done to create user lock-in and to make sure the users share personal information so the SOCs can do data mining with it. The knowledge about the position on the market and their competitors is important for the individual SOCs in order to utilize the right features and methods, so they can become a competitive player. To monetize on their service SOCs can make targeted ads to the different user profiles, charge subscription fees, sell profile upgrades or extra products. But these methods can be hard to make a profit on as the users prefer free services and start to ignore the ads. Therefore, the option to perform data mining is getting more important. User data can be used to make research about the users in general to uncover market trends and user opinions. These data can be worth a lot to third party companies. It is important to focus the data mining on general trends based on large user groups while keeping the individual user data confidential - in order not to scare away the users as they feel their personal data is being sold or used against their will. The conclusion of the thesis is that users are the primary source of value creation in SOCs. The features and methods presented in the literature are all aspects that can help to attract and keep the users interested in the SOC. But it is important to know the market and the purpose area of the SOC to utilize these methods in the right way, especially when looking to monetize the value.
|Educations||MSc in Computer Science, (Graduate Programme) Final Thesis|
|Number of pages||110|