Impact of social networking

Published: Last Edited:

This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.

The Impact of Social Networking on e-Business

What is exactly the social networking and what is its impact to our daily life and e-business? This paper answers these questions and also it is introducing possible applications focusing on benefits, opportunities and risks. It is discussed, how could a company take advantage from social networking tools, what to consider of and what should care about. After all, everybody should take a look at the future!


AS an effect of the growth of the internet and WEB 2.0 new capabilities and tools have been added to make our daily life easier and also more entertaining.

Networking can already offer us plenty of options, capabilities and applications. The social networking is a new feature of the internet and it met a sudden big extension, growth and support from a huge number of fans.

The services of social networking aim at the creating of on-line communities by people with common interests and activities. These services operate mainly on the Internet and offer multiple means of communication and interaction to registered users/members. In order to create such an account, users have to make a registration by providing personal details and by creating a personal profile which can also described as a personal page or blog.

The users of these services may publish and share personal information with other groups of users or individual members, such as matters relating to hobbies, their work, short biography, CV, preferences, their loved ones, etc, via their personal page (profile section) and they can publish photographs, video, and more in their private page (blog) or in the form of messages, private or not. The members of these services can retain this personal page (blog) and customize its appearance and control its content by themselves.

Subsequently, a user can seek old fellows, friends and colleagues or to make new contacts and exchange with them all the above information and data.

There is no doubt that the services of the social networking constitute a new form of socialization and communication, especially among young people. However, these services give a new dimension to the meaning of personal space but it is also creating serious concerns about the infringement of users' privacy, whose personal data are made available to the Internet.

Facebook was created at February 4th 2004 in Massachusetts U.S.A by a twenty years old American student, Mark Zuckerberg, as a mean of communication of students and graduates of the University of Harvard. It reached around 60 million users at the end of 2007 and is one of the most popular websites worldwide together with the Google, Yahoo! and e-bay.

On the other hand, it is estimated that the MySpace had over 110 million users worldwide at the beginning of 2008.

(Ellison, N. B., Steinfield, C. & Lampe, C. 2007, & The social repercussions of the internet by Computing & New Technologies Centre of Florina, Greece). In the meantime, similar student networks have already created in other countries such as Greece, Germany, Russia and China.

"As a consequence of this fast take-up, Social Networking Sites have become one of the largest identity and reputation management systems in the world, and mobile social computing applications such as Twitter have rapidly become a global phenomenon, providing almost real-time access to, for example, the development of socio-political events" (The Impact of Social Computing on the EU Information Society and Economy, page 17).

The social networking websites give the impression that the world has now become very small and that we all belong to the same community. These websites and also the social networking applications provide many different abilities and tools for communication and expression and any user can choose with who will communicate. Members of these sites may participate in forums, which are groups with people who have common interests and concerns. In other social networking sites, users are able to share their professional background and interests in order to find new prospects.

It is true that the faster users browsing into the internet the more opportunities large companies gain to collect information in order to start bombing users with commercials and be advertised.

So, it have been given a taste of what the social networking is and at the next chapter will be discussed its impact on e-business. Additionally, will be provided details on social networks capabilities and how users react on this new features and functions of the internet and networking generally.

The impact on e-commerce and e-business

Some years ago in order for the employees to have a short time break from the office environment, they were listening some music, were reading the latest news from the newspapers or they were going for shopping. Today all the above and many more (like online flash games), can be easily done in the comfort of the workplace/office utilizing of the huge networking and internet speeds and the extremely many choices of new technologies.

Research in major Western countries, has shown that approximately half of the employees of companies, admit that the Internet and social networks of any kind is their main activity at the hours they spend in their work and this is due to the endless options offered for all and for any interest by the Internet and the social networks (The social repercussions of the internet by Computing & New Technologies Centre of Florina, Greece).

In 2000, the American Mitch Maddox (known also as DotComGuy) had not seen the world outside his house for a whole year, neither his neighbourhood, because he didn't get out of his house. He had experienced a "normal life" in the virtual environment which was offered by a personal computer and a telephone cable. He was the first long-term experiment of whether it is possible for someone to survive depending only on the Internet and the services that it can offer. And the experiment had absolute success. The internet and social networking technologies helped Mitch to manage all his needs. He went shopping, he bought food, he had contact and communication with other people, he had entertaining and he also fell in love through the Internet! (, volume 22).

So, as can be seen, the internet and the social networking are deeply inside our daily life with a huge acceptance. As a consequence, this can easily affect any business and the commerce in several ways.

E-business (electronic business), is the adaptation of traditional business model in the new electronic reality or the growth of new business model with object only the Internet.

Otherwise, is the transaction of business by way of electronic media and the internet, such as telephones, fax machines, computers, websites and video-teleconferencing equipment. This generally is broader than e-commerce although some may view e-business and e-commerce as interchangeable terms.

"Enterprises strive to take advantage of computing and networking advances in order to provide additional functionality and support increasingly complex business functions. The holy grail of the modern enterprise is e-business, which can be loosely defined as the discovery, procurement and sourcing of goods and services, over computer networks and within, but especially across, the boundaries of business units and enterprises. The challenge of conducting e-business across organisational boundaries is the space of opportunity for agents and ontologies." (Labrou 2002).

There are many benefits of leading a business to the direction of networking. It automatically gains e-business and e-commerce features and it is also able to gain reputation, financial benefits, abilities for expanding, etc.

Two giants of printed journalism, "Wall Street Journal" and "New York Times", decided to abolish the electronic subscription of their newspapers and to make them available on the Internet free of charge. They simply found that the revenues from electronic subscriptions were slightly ahead in profit that they could have from the online advertising, which is a fast rising market (The social repercussions of the internet by Computing & New Technologies Centre of Florina, Greece).

It is widely verified that the readers do not pay in order to obtain information electronically. They know well that they will find it free of charge on the Internet. Thus, the newspapers have seen their influence to be reducing drastically and this because they had set subscription for the electronic version. The result was that the printed version was reading more from the readers than the online one.

There are several reasons why companies should advertise on the social networking sites and one of them is because despite the fact that these sites have thousands of users, most of the pages that their users are browsing, are the same. This means that users will see the same advertisements every time, even though these advertisements will change at every page refresh or reload.

The traffic growth of some websites by social networks is a result of a number of factors. Some of them 'organic' and some of them down to clever marketing. "The earliest examples of successful social network marketing are typically more organic or grass roots, whether it is the Arctic Monkeys building a following via MySpace or 14,000 people successfully campaigning for the return of Cadbury's Wispa on Facebook" (The Impact of Social Networking in the UK, Hitwise 2007).

The Internet and social networking is the most important factor that affects developments in the process of direct promotion of the company and its products or services. Thus the creation of a website, blog or any other social portal is necessary according to the characteristics of the markets in the new reality.

Even a small business, a small blog or small podcasting sites can become a source of revenue and this is because of the advertising. Advertising is one of the biggest sources of revenue but exact the opposite for the one who needs to be advertised.

Media industries, like television and radio have lost a lot of traditional audience but they gained much more from the internet free live streaming. At first this was a financial hole but it soon covered by the revenues from the online advertising and commercial banners.

"The internet has enabled consumers to interact directly with advertisers and advertisements" (Electronic commerce, Efraim Turban).

A research which took place to many countries all over the world, found that three-quarters of PC uses were willing to spend more time to communicate and be updated over the internet and social networking sites and tools (like social networking software applications) than to watch television (The social repercussions of the internet by Computing & New Technologies Centre of Florina, Greece).

An example could be the IM applications (Instant Messaging) or the online chat rooms. With e-chat and IM the participants are able to exchange messages (often they can also exchange photos, documents, sound files, etc.) in real time. The software industry estimates that several hundred thousand web sites have millions of chat rooms and forums.

Nowadays, in most of the cases, the customer-supplier relationships are not sustained with face-to-face meetings. Here is where online communities give the solution, which is increasingly being used to serve business interests.

Figure 2 is an exhibit which has been printed to the "Internet business models and Strategies" of Allan Afuah & Christopher L. Tucci, 2000, and can be seen the e-business revenues by percent and categories for year ended December 31, 1997.

A discussion of possible applications on e-business focusing on opportunities, benefits and risks will take place at the next chapter.

Possible applications focusing on opportunities, benefits and risks

"E-business, derived from such terms as "e-mail" and "e-commerce", is the conduct of business on the Internet, not only buying and selling but also servicing customers and collaborating with business partners" (Tim D. Nelson, 2001).

IBM used that term first in October 1997, when it launched a thematic campaign built around the term. Nowadays, big corporations or even small companies and shops are rethinking their businesses in terms of the Internet and the new capabilities of social networks and applications.

Any company now is able to use the internetworks to buy parts and supplies from other companies (B2B: business-to-business direct business model), to collaborate on sales promotions (B2C: business-to-consumer model) and to do joint research. Exploiting the convenience, availability, and world-wide reach of the Internet, many companies, such as, the book sellers have already discovered how to use the Internet successfully.

The electronic trade, particularly in the B2B model has been developed in satisfactory degree in all enterprising branches. Enterprises show willing their incorporation in their everyday routine practices of electronic sales and supplies enjoying as return reduction of their functional cost (e-business [email protected], "The European e-Business Report", 2005 edition).

On the other hand B2C model allows to a company as big or small it is to reduce the cost of customer service and support by allowing customers by helping themselves to information and downloads as well as service and support applications. It is a good point for referring to the forums and other discussion groups created by users who share their knowledge with other users in order to find a solution to a possible problem they are experiencing. Also, a smart application of the social networking capabilities is what McAfee enterprise done about its customer support. McAfee uses his own software of instant messaging (chat) in order to directly guide its customer to the solution of his/her problem.

So, B2C model in co-operation with social networking capabilities can encourage customers to make use of the lower cost web channel and make easier for customers to do business with the company as in the meantime business managers can get other works done in other more expensive channels.

Furthermore, the customer offers the potential for personalised e-marketing campaigns and the company can improve the customer service something that is critical to maintaining and increasing customer loyalty. All these can be done with the help of the information that will have been collected for all customers and customers' needs from forums, customer comments on company's blog for example, groups and any other customer information source that is born from a social networking tool and media.

"Dell found that quality of customer service was the most important factor of e-loyalty and repeat on-line sales followed in second place by on-time delivery. These factors considered more important than the product or the price." (DataBase Associates International Limited© 2000, Information Age Magazine, June 2000).

There is an issue that the business managers must have in mind. Many companies are rushing into e-business without well planning and without take under serious consideration the risks that may occur. One of these risks is the adoption and the applying of wrong and old traditional business models to e-business environment. The key of success about the web in a B2C model is that the web puts the consumer in control. "Therefore, even though the internet magnifies everything making it easier to be customer centred and build loyalty, it also makes it easier to look disorganised and removed from the customer. It is the customer who will drive business in the e-business world" (DataBase Associates International Limited© 2000, Information Age Magazine, June 2000).

Some other applications of social networking tools that a company can take advantage of are the creation of portals, blogs, forums and groups for direct and more social interaction with the consumers, which covers concrete conditions and requirements, because the right communication with consumers and customers is always the primary goal.

Some of the including topics of that blog could be the enterprising missions, assignments, studies and researches, news and achievements including of course a kind of advertisement, meetings, congresses and conferences that the company would join or organise.

Additionally, can take advantage of the creation of questionnaires inside its blog or a discussion group, which is the most widespread method of collection of primary information and elements. Its basic advantage is the high speed of collection and editing of information and the final results as well as the low cost of concretisation. As well as the spread of smart designed and personalized advertising banners into relevant sites, chat rooms, etc.

The main objectives of the creation of this portal/blog are the promotion and projection, its operation as a familiar especially to youth and easy to use channel of communication, the support of the general and operational planning movements, the announcement and distribution of their results and in generally the overall support and aid of company's picture.

Finally, if the company find it useful and profitable in any way, can send newsletters in e-mail format to customers and could head of the creation of a social networking software like IM/Chat for e-marketing and customer support purposes. (Internet Business Models & Strategies, 2002 - Advertisement in Electronic Commerce, 2008)

The final chapter of this paper is the conclusion. The synopsis of all the above, the lessons that have been learnt and the recommendations that can be made as a result.


Social Networks keep people in touch, give to their users the capability of sharing personal information and context like photos with friends. They are also a source of meeting new people or even join a forum, a discussion group or at the friendlist of their favorite music band or computer software enterprise. These are a place from which you can promote yourself in order to find a job or a job to find you.

Social network media are nowadays deeply inside our daily life and of course companies would not lose a chance of use this media and its tools for advertising, marketing or other beneficial purposes even more personalized than the traditional marketing way. And anybody who uses this technology can cover almost all of his needs by the comfort of his desk or even his home.

However some enterprises are increasingly concerned about large number of their employees turning to social networking tools for job related purposes and they are trying to find a sensible way to manage it.

The highest executives of enterprises will not be supposed to prevent and prohibit the use of social networking websites as Facebook and MySpace by their employees.

The encouragement of employees who use such technologies helps in the creation of relations and narrow contacts between company employees and customers thus it can be proved beneficial for the company.

Peter Bradwell (researcher at Demos, declared that such internet services can improve the productivity, the innovation and the democratic processes inside the enterprises. However, it will be necessary the existence of practical directives that would determine their use in the workplace. As Bradwell said, the prohibition of Facebook and YouTube it is almost impossible to be applied. The companies could only impose a maximum permissible time limit for such activities.

Bradwell's research led that the effort of control of web pages as Facebook, in which hundreds millions users are participating around the world, could have negative repercussions, while it considers erroneous the ignorance of importance that has acquired the social networking of employees. (

In conclusion, there are hundreds of possible applications focusing on opportunities, benefits or even risks. The most common and basic are the e-mails, personalized advertising banners and the creation of portals at social websites and relevant tools.