Making A Term Paper On Social Network

Gloria Hamilton 01/03/11 10:59 AM

Do Friends Influence Purchases in a Social Network?

Social networks, such as Facebook and Myspace have witnessed a rapid growth in their membership. Some of these businesses have tried an advertising-based model with very limited success. However, these businesses have not fully explored the power of their members to influence each other’s behavior. This potential viral or social effect can have significant impact on the success of these companies as well as provide a unique new marketing opportunity for traditional companies. When you are making your term paper you need to keep in mind some points related to citation and these are essential and very important for your term paper article. The basic step of writing for any type of term paper is to make the intro strong in nature.

Three questions are important when you are making paper on this topic– do friends influence purchases of users in an online social network; which users are more influenced by this social pressure; and can we quantify this social influence in terms of increase in sales and revenue.

Social networks have become a cultural phenomenon. Facebook, one of the largest social networking sites in the U.S. was founded in 2004. By February 2009, it boasts more than 175 million active users and continues to grow rapidly. Worldwide these users spend 3.0 billion minutes each day on Facebook. More than 850 million photos and 5 million videos are uploaded on the site each month. There are hundreds of other similar sites including Myspace, Friendster, Xanga and Bebo.

This cultural and technological revolution is not limited to the United States. Myspace has already launched its international sites in Britain, Australia and France and plans to expand its services to nine other countries in Europe and Asia in the near future. More than 70% of Facebook users are outside the U.S. and more than 35 translations are available on the site. Other countries have their own versions of Facebook and Myspace. In spite of this cultural and social revolution, the business viability of these social networking sites remains in question. While many sites are attempting to follow Google and generate revenues from advertising, there is significant skepticism if advertising will be effective on social networking sites. Seth Goldstein, co-founder of Social Media Networks, recently wrote on his Facebook blog that a banner ad “is universally disregarded as irrelevant if it’s not ignored entirely”.

We also quantify the social influence in terms of changes in purchase probability and revenues. Our results show that middle-status users show, on average, a 5% increase in revenue due to social influence. In contrast, the high status group’s revenue declines by almost 14% due to these social effects.
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