Transcript File - management information systems

Chapter 7
Virtual Communities
Reference Book By:
Gary Schneider
Virtual/Online Communities
The Web makes it possible for people and organizations to form
online communities that are not limited by geography.
Individuals and companies with common interests can meet
online and discuss issues, share information, generate ideas
and develop valuable relationships.
A virtual community also called Web community or online
community, is a gathering place for people and businesses that
does not have a physical existence. Many sociologists believe
that the communication and relationship, that happens online
are similar to those occur in physical communities.
Due to the popularity of online communities, people were
experiencing communities with different interest as to
photography, gardening, pet, gaming etc. This is how social
networking emerges that lets people to interact on different
interest on different communities.
Social Networking
A social networking site is a Web site that allows individuals to
create and publish profiles, create a list (on common interest)
of other users with whom they share connections, control that
list, and monitor similar lists made by other users.
LinkedIn is a social networking sites where individuals from all
professionals create profile (like a resume). The purpose is to
connect with people with similar professionals. This helps to get
involved in a group project or to get hired by an organization.
YouTube popularized the inclusion of videos in social networking
sites. Other examples of popular social networking sites:
Facebook, Google+
The general idea behind all of these sites is that people are
invited to join existing members who think they would be
valuable additions to the community. This way a set of
connections is built that works as a valuable resource even for a
business.
Web Logs (Blogs)
Blogs are Web sites that contain discussion on current issues
and events written/authored by individuals. On the Web sites,
organizations may have a separate page for blogs, so that they
can discuss on current issues on products and services and
invite the current customers to participate in the discussions. It
means customers are given opportunities to provide
feedback/suggestion on the products/services.
Since blogs encourage similar minded people to discuss on
common issues, it act as another type of social networking
sites.
Social Networking Web Sites for Shoppers & Learners
Social shopping refers to the practice of bringing buyers and
sellers together in a social network to facilitate retail sales.
Craiglist is one of the first of these to include information on
available products and services to buy and sell as per different
locations. Social shopping does not facilitate payments. It is
just a meeting point among buyers and sellers
Virtual learning network is another kind of social network that
works as a meeting point among teachers and students. It is
specially used as a tool to facilitate distance learning. It
includes tools such as bulletin/announcement boards, chat
rooms, discussion rooms/blogs, lecture resources etc.
Revenue Models: Advertising-Supported Social
Networking Sites
Social networking sites that draw enough visitors can generate
advertising revenue, especially compared to the costs of
running such a site. For advertisers, these are great places to
post advertisement since they can touch different customer
bases.
Sites that have higher numbers of visitors can charge more for
advertising on the site. Stickiness is also an important element
of a site’s attractiveness to advertisers. One rough measure of
stickiness is how long each user spends at the site in a month.
Web sites with high degrees of stickiness used to obtain upfront cash payments from advertisers. In recent years, social
networking sites charge advertising fees as a percentage of
sales generated from sales leads on their sites.
Online Auctions: Auction Basics
Online auctions function as a type of online communities where
sellers and bidders meet. An auction site can charge bidders
(buyers) and sellers to participate, and it can charge for
advertisements. People interested in trading specific items can
form a separate space that advertisers will pay extra to reach.
In an auction, a seller offers an item(s) for sale, but does not
establish a price. This is called “putting an item up for bid”.
Potential buyers (bidders) are given opportunities to look the
items, then they offer bids. The whole process is managed by
an auctioneer. In the case of online auction, an online site acts
as an auctioneer.
Online Auctions: General Consumer Auctions
The most successful consumer auction Web site is eBay. Sellers
and buyers must register with eBay. Sellers pay eBay a listing
fee and a percentage of the final selling price. Buyers pay
nothing to eBay. In addition to paying basic fees, sellers can
choose from a variety of enhanced extra-cost services,
including having their auctions in bolded type and featured in
lists of preferred auctions.
To demonstrate seller reliability, eBay instituted a rating
system. Buyers can submit ratings of sellers after doing
business with them. These ratings are attached with sellers’
name. eBay also institutes buyer ratings to protect sellers from
buyers with bad deeds.
In eBay auctions, bidders must constantly monitor the bidding
actively if they want to win the auction. All auctions have a
minimum bid increment, the amount by which one bid must
exceed the previous bid. An auction is finally won after the time
to bid ends.
Online Auctions: B2B Auctions
Unlike consumer online auctions, B2B auctions evolved to meet
a specific existing need. Many manufacturing companies
periodically need to dispose of excess inventory. Many times,
unforeseen changes in customer demand for a product can
compel manufacturers to get rid off of the excess raw materials
and finished goods.
To do this, a firm typically have liquidation specialists/brokers
to find buyers. Online auctions are the logical extension of
these inventory liquidation activities. Large companies create its
own auction site that is supervised by the liquidation specialists.
Small companies use third-party web auction sites that act as
liquidation brokers.
Online auctions can be used to hire people on temporary basis.
For example: Hospitals can post job circular on hiring nurses
mentioning standard wages. The nursing agencies can post bids
(a bit cheaper or equal to the standard but efficient services) to
secure temporary contracts for their nursing services.
Online Auctions: Services
Auction escrow services: To defend buyers from fake sellers,
escrow services are available. It is an independent party that
holds buyer payments until the buyer receives the purchased
items and is satisfied with those. Sometimes, escrow services
receive goods from sellers, inspect those and delivers to
buyers. Whatever the type of service, they charge fees from
buyers. Example: Escrow.com and eDeposit
Auction directory and information services: Some firms
provide auction directory services on Web sites. These
information sites publishes e-mail newsletter with articles about
developments in the online auction industry. It provides
guidance for new auction participants and helpful hints and tips
for experienced buyers and sellers. Example: AuctionBytes
Online Auctions: Services
Auction software:
For buyers: Auction software for buyers observes auction
progress until the last second of the auction clock. Just as the
auction is about to expire, the software places a bid high
enough to win the auction. The software synchronizes its
internal clock to the auction site clock and execute its bid with
maximum precision. Example: Sniping software.
For sellers: Auction management software for sellers can
help with automate tasks such as image hosting, advertising,
page design, feedback tracking, e-mail management etc.
Using these tools, sellers can create attractive layouts for their
pages and manage auctions.