How Social Networking Makes Money Essay

A.Social networking is a daily activity for most of us. Facebook, Twitter all this sites have hundreds of millions of users. One thing I always think about, are these sites are businesses? It’s free to join and you do not need to pay to start building networking. B.If we take a look at the stock of the entire social media network we will find that the companies are valued in the billions of dollars. It’s a booming industry. How do they make money? Reasons A.First thing, social networks start with funding from Venture capitalists. a. Facebook & Google are the great example. They can reach very large audience at a very low cost. b. Creative Products & Promotions for example face book’s gifts. B.Data mining a. Data is the base of any business. It is potentially very valuable for companies’ growth. b. Some companies are â€Å"eavesdropping† on conversations, reading what users are saying about their products or competitor’s product. For Example Yelp, Twitter C. Advertising & fees the most common way for websites to generate revenue. a. A social networking site like Facebook has millions of active users. Access to that enormous user base is a valuable commodity. b. Charging for membership fees: To use certain features of the site they ask for the upgrade. For example, linked in. Linked in withhold key features from users until they choose to upgrade to a premium account. I hope this gives you a sense of why the market shares are in billions for these sites and where social networks are and where they are going to be in future. It is a growing industry and one can actually start making money from social networking sites. Invest your time learning how to make money with this.