Business Model - Networks

In an earlier blog, we discusses about information asymmetry and its implications to the business. The importance of understanding the patter of a customer can never be undermined. Today's business model - Networks deals with information gathering.

When you look at the "social networks" around you, definitely, most of us would have used one of them - be it facebook, orkut, myspace etc. How do these really make a value proposition to others? It is through their potential, and value proposition that they really earn money.

Advertisements and Promotions on such social networks are but an obvious way out; their value to the businesses is much more than promoting their business with advertisements.

When we are on social networks, un-knowingly or un-intentionally (and sometimes intentionally) we reveal a lot of information. Not just that which we put on our potential, but also about our interests, our friends, our interactions in the society, our dreams, etc. These could add a lot of value to the businesses which would like to engage their customers using their social image (relate to concept of ego), and understand about their behavior, likes, dislikes etc (analytics about your customer) etc.

While to certain extent from the business point of view this is beneficial, the large data that an individual reveals about himself on the social network can readily be misused by miscreants. Security and Privacy are obvious challenges which when address effectively could not just engage the larger user base people better but also ensure there is satisfactory benefit every stakeholder of the system.

Read in Kannada: http://somanagement.blogspot.com/2011/04/blog-post_25.html