internet and e-commerce assignment 1

Contents


Introduction 3

About hi5 3

hi5 Audience 3

Market share of hi5 4

Competitors of hi5 5

Facebook 5

MySpace 5

Bebo 6

Friendster 6

Business model in hi5 7

Advertising Model 7

Gift store 7

Our Business models 9

Title: 9

Background: 9

Business model desecration: 9

Book categories: 10

hi5 BookStore Features: 11

Market and Competition of hi5 BookStore 11

Target market 11

Market need: 12

SWOT Analysis 13

Competition of Bookstore Module: 14

Amazon Bookstore: 14

Barnes & Noble Bookstore: 14

Conclusion 15

References 16













WEB 2.0 TOOLS EXPLORATION AND BUSINESS MODEL PROPOSITION



Group Members



Wali chizi augustine 1000716190













Introduction



Few social networks currently charge money for membership. In part, this may be because social networking is a relatively new service, and the value of using them has not been firmly established in customers' minds. Companies such as Hi5, MySpace and Facebook sell online advertising on their site. Their business model is based upon large membership count, and charging for membership would be counterproductive. Some believe that the deeper information that the sites have on each user will allow much better targeted advertising than any other site can currently provide.

Social networks operate under an autonomous business model, in which a social network's members serve dual roles as both the suppliers and the consumers of content. This is in contrast to a traditional business model, where the suppliers and consumers are distinct agents. Revenue is typically gained in the autonomous business model via advertisements, but subscription-based revenue is possible when membership and content levels are sufficiently high



About hi5

hi5 is a social networking website based in San Francisco, California. The company was founded in 2003 by Ramu Yalamanchi. By 2008, comScore reported that hi5 had become the third most popular social networking site in terms of monthly unique visitors.

Bill Gossman was appointed CEO in April 2009, and since that time, hi5 has refocused itself as a social gaming platform and opened itself to new game developers. Gaming industry veteran Alex St. John joined the company as President and CTO in November 2009, and in early 2010, hi5 acquired social gaming company, Big Six. The company raised $20 million in series A venture capital from Mohr Davidow Ventures, as well as $15 million in venture debt, in 2007, and announced it had raised $3 million convertible note from existing investor Mohr Davidow, bringing the funding up to $38 million. Quantcast reports hi5 has 2.7 million monthly US visitors and 46.1 million global visitors.

hi5 Audience

The hi5 audience is huge, global, and highly engaged. With over 50 million monthly unique visitors and 20 billion monthly page views worldwide, we have the scale and reach leading advertisers demand.

hi5’s audience skews male, comprising 59% of our visitors, and young – with 67% of our users falling in the coveted 18-34 age bracket.



hi5’s US audience is one of our largest and fastest-growing geographies. hi5 has over 5 million monthly unique visitors in the US, and the site attracts large segments of African-American and Hispanic users. Ad campaigns can be targeted by age, gender, ethnicity, language, geographic location, and many other factors.

Market share of hi5

Due to hi5’s shift in focus to social gaming, comScore reclassified hi5 as an online gaming site in early 2011. According to comScore, hi5 ranked as a the 6th most trafficked online gaming site.

Although created and headquartered in the United States, it is more popular in other countries, particularly in Latin America, being ranked 37th in the world only among people who have the Alexa toolbar installed on their browser but only 84th in the US.





Competitors of hi5

Facebook

It’s nearly impossible in this day and age not to know about Facebook, it is a social network site that started out strictly for college students and was available by invitation only. Now, it is a cultural phenomenon stretching across the globe. With more worldwide users than MySpace, Facebook has taken hold as undisputable leader amongst social networking sites.

The network is made up of hundreds of separate networks based around schools, businesses and regions. Although registration is now open to the public, the site still caters to a college and high school demographic focusing on networking through groups and social activism.

Profiles allow users to post pictures, comments, blogs and apps. Additionally, it has some of the best privacy options on the Internet. We felt that Facebook really encouraged using the site to foster relationships with people you already know, or friends of friends. Within hours, we were already in touch with scores of old friends, relatives and acquaintances.

The only real griping we could do concerns Facebook’s lack of customization options. However, most users like the design and uniform feel of the site the way it is. Choosing between MySpace and Facebook is really a matter of interface preference and going to where your friends are. But, if you’re new to the whole social networking thing, Facebook is the place to be.



MySpace

MySpace is extremely popular and receives a lot of traffic, but is not for the serious blogger. The advantages to MySpace include the ability to upload and share video, audio and image files as well as a blog. But blogging is not the main business of MySpace, MySpace’s central focus is social networking.

One of the problems we have with MySpace in terms of blogging, is not many people would want to send their business associates or family to a site that displays the kind of material MySpace users post. MySpace does give you a link to your blog, so you could send your direct link to someone, but if they had to search for your blog it is nearly impossible to find. For example, in order to find work–friendly blogs, we tried to find blogs on cars and dogs; we were given a list of blogs that had more to do with sex than cars or dogs.

If your primary interest is social networking and non–professional blogging, then MySpace will work for you, otherwise try WordPress.



Bebo

Bought by AOL, this social network service has been gaining ground in the United States, it’s been nothing but good news and consistent growth. Extraordinarily popular in the UK, Bebo is beginning to give some of the other social networking sites a real run for their money. Like other sites you can personalize your profile, add apps, set privacy settings and join groups.

However, we found that navigation and friend finding on Bebo to be a bit difficult, and although they take great pride in their security settings, we found that it was a little overboard.



Friendster

It is one of the most popular social networking sites in Asia. Now, it is starting to make an impact in the United States. Friendster provides plenty of networking features, the ability to customize your personal profile and to get you on your way to establishing a large network of friends.

Discover other avenues of expression by posting blogs and joining forums. You can choose from a variety of extra features like videos and groups. Friendster tries to cater to a slightly older crowd requiring users to be at least 16 to join



Business model in hi5



Advertising Model

With millions of user worldwide, hi5 delivers the broad reach and precise targeting to maximize the impact of your online marketing spend. By combining innovative creative options with powerful viral marketing techniques, hi5 is the most cost-effective way to penetrate the global youth market while reinforcing your unique brand identity.

hi5’s users are highly engaged – spending, on average, over 20 minutes and 50 page views per day. Nearly 80% of hi5 users would recommend the site to a friend, and advertisers on hi5 benefit from that engagement and brand loyalty. With immersive, interactive promotional options, you can generate buzz for your brand at a key life stage – driving early adoption and ongoing preference.

With a rich set of demographic and behavioral data, hi5 enables advertisers to target their precise audience based on attributes, interests and activities. Whether you’re a global brand or regional advertiser, hi5 delivers the audience you want with the efficiency and flexibility you need. We offer a broad range of advertising products: targeted display banners, rich media placements, game and video pre-roll, custom profiles, viral promotions, home page take-overs, contests and sweepstakes, adver-games, and other custom sponsorships.



Gift store

Popular international social network hi5 has introduced virtual gifts and currency to its users as a new way to spread cheer during the holidays and beyond. Starting today the site is offering an assortment of 36 virtual gifts that represent a cross-section of the world’s customs and cultures, as diverse as its user base.

hi5 is certainly targeting very specific occasions, unlike other social networks that have more generic gifts for sale. For example, you can now buy a “Rosca” – a cake that Mexicans traditionally eat on January 6th to celebrate Three Kings’ Day – or a dreidel, which is a popular toy for children during the Jewish holiday Hanukkah.



All of the hi5 virtual gifts come “wrapped” so that your recipient can feel like they are really opening it, including the crinkle of the wrapping paper. With a massive international audience in regions like Latin America I think we can expect to see even more culturally specific virtual gifts hitting their store soon.

The price of these gifts is set at 80 coins, but depending on where you live in the world and the current exchange rate, the cost of coins may vary. In the US you can snap up 80 coins for $1. Mexico will be 9 Pesos, the Euro area will set you back 1 Euro, Romania is 2 Leu and for users in Thailand you’ll need to shell out 17.50 Baht. These prices are in line with other social networks, which should help them become very popular, very quickly.

















Our Business models

(hi5 BookStore)



Title:

“hi5 BookStore” to sell book and magazines using social network (Hi5)



Background:



Since the mid-1990s, online bookstores have become an e-commerce mainstay, connecting book lovers with an almost infinite selection of titles. Unlike brick-and-mortar bookstores that can stock only a limited amount of titles, online book sellers frequently carry rare and out-of-print selections in addition to current titles, putting bibliophiles, students, antique book collectors and everyone in between in reach of millions of selections. In addition to printed books and magazines, most online booksellers also carry other forms of media, including CDs, DVDs, audio books, and downloadable ebooks. Many online bookstores also carry reading-related accessories and gifts, such as bookends, ebook readers, and literary-themed collectibles.



Business model desecration:



International social network hi5 will introduce virtual bookstore model (hi5 BookStore). The hi5 bookstore will often sell both new and used books, making an online bookstore a good choice for bargain-hunters or students looking for a cost-effective alternative to campus shops.

The hi5 BookStore typically charge for postage, however, which can get pricey. To draw in customers from traditional book shops, some sellers will waive shipping and handling on large purchases.

Unlike traditional brick-and-mortar booksellers that require you to look through rows upon rows of shelves, online bookstores make it quick and easy to find what you want. Thanks to careful cataloging and keyword-based search systems, an online bookstore will allow you to search for books by title, author, ISBN, price, release date, or genre.

hi5 BookStore will also allow you to take a "virtual peek" inside the book and review the title page, table of contents, and sample sections from the text before you buy it.

hi5 BookStore will also offer book reviews and rating systems so that customers can see what other readers have to say before they make a purchase. Likewise, hi5 bookstores will also feature personalized recommendations based on your prior purchases and the items selected by other readers who bought the same books as you.



Book categories:





• Accounting & Statistics

• Asian Studies

• Business & Management

• Children Malay Readers

• Classics

• Chinese Books

• Engineering & Technology

• Family & Health

• Finance & Investments

• Food & Drinks

• General Fiction

• Home Decoration & Improvement

• Hospitality

• Humanities

• Information Technology

• Islamic Books

• Junior Activity

• Junior Reader

• Junior Reference

• Language & Reference

• Law & Legal Studies

• Lifestyle

• Malaysian Collection

• Marketing & Advertising

• Natural History

• Nursery Rhymes & Poetry

• Preschoolers

• Religion

• Romance

• School Reference

• Science

• Science & Fantasy

• Self Development

• Sport & Hobbies

• Teen Reader

• The Arts

• Travel

hi5 BookStore Features:



hi5 BookStore will offers one of the best online bookstore selections . There is a huge variety of genres with categories like ‘Bargain Books,’ ‘Fiction,’ ‘Recreation,’ and ‘Reference & Textbook.’ They even have books on tape and CD for those preferring alternative reading methods.



• Editors Book Blog

• Just In! New Book Shipments

• Featured authors & titles

• Guest book reviewers

• Ability to take a sneak peek at the content of some of the books

• hi5 Store Books Top 100

• Free shipping on many items without a minimum purchase requirement

• Easy interface for book searches

• Used books and textbooks available for sale

• Ability to create a Wish List of items you’d like to own eventually



Market and Competition of hi5 BookStore



Target market

• Target Market of hi5 BookStore will be people from all races and ages, especially those people who are interested in reading.

• Bargain-hunters or students looking for a cost-effective alternative to campus shops.

• Related to those who tired from traditional brick-and-mortar booksellers that require you to look through rows upon rows of shelves, online bookstores make it quick and easy to find what you want.







Market need:

Reputation: The online counterparts to traditional bookstores are a safe bet for customers who are new to buying books online but if you find an online bookstore that does not have a traditional counterpart, this does not necessarily mean that the company is not reputable. When evaluating an online-only bookstore, look for secure checkout services, satisfaction, guarantees, and accreditations from consumer bureaus.



Special orders/rare books: If you are looking for an out-of-print book, textbook, or specialty item, many websites can place special orders. Keep in mind that out-of-print or rare books may be pricey and they may be final sale items that cannot be returned.



Customer service: A credible online bookstore should offer some sort of customer support by phone or email. Be wary of any bookseller that does not provide a customer service telephone number or email address.



Expedited shipping: If you need your books in a hurry, your online bookseller may be able to expedite shipment for an extra fee. Even if you do not need rush service, review your online bookseller's shipping options so that you can compare postage and handling prices between stores.



Return policy: Before purchasing books online, review the company's return policy and ensure that you can send back your book if it arrives damaged or is defective. Also see if your online bookstore will let you return purchases for any other reasons.



Rewards programs: Frequent book buyers should look for an online bookstore that offers discounts or rewards. Many traditional bookstores also let current rewards program members use their discount cards online, so if you have already signed up with your favorite bookseller, check out their website to see if you can use your current benefits online.

Gift services: Since online shopping is an easy way to buy gifts for far away friends and family, check with your online bookstore to see if they offer services such as gift-wrapping, personalized cards, and gift receipts.



SWOT Analysis

Strength:

• Stickness

• Cost effective

• User friendly

• Countinuous change and improvement

• Leverage of reaching more people

• More measurable



Weakness:

• Legal issues

• Diffucult to maintain

• Consisteny

• Effort v/s result

Operations:

• Tag global markets

• Viral marketing

• Peer to peer business model

• Effortless talent

Threats:

• Growing competion

• Keeping up with the latest trend

• Managing growth

• Information security





Competition of Bookstore Module:

Amazon Bookstore:



Amazon.com is probably the best-known name in the online bookstore industry –and with good reason, it is the largest online retailer in the world. The company is not only one of the oldest in the market, but it has consistently worked to stay one step ahead of the game. At the same time, there is still a good amount of humanity to the site that allows shoppers to buy with comfort, understanding that their customer service and return issues will be handled with exemplary care.

Amazon Features:

• Editors Book Blog

• Just In! New Book Shipments

• Featured authors & titles

• Guest book reviewers

• Amazon.com Top 100

• Pre-order picks

• Free shipping on orders over $25 (restrictions apply)



Barnes & Noble Bookstore:

While Amazon.com is the largest retailer on the internet, Barnes & Noble is the overall largest book retailer in the U.S. As such, it is not surprising that the company offers one of the best online bookstores around. Though they do not offer a few functions that Amazon.com does, they remain a strong competitor and are able to pair online services with those in their brick and mortar stores, which many online retailers cannot do.



Barnes & Noble Features

Barnes & Noble offers a number of features that should appeal to customers, including

• Free shipping available on orders of more than $25

• Ability to create a Wish List of items you’d like to own eventually

• Used books, textbooks, and DVDs are also available for sale





Borders Bookstore:

While Borders is one of the biggest players in both offline and online bookstores, they are lacking crucial options that could help them better compete in the virtual world. Their e-store is not as well thought out as Amazon.com, but the shop does provide an adequate shopping experience and the site is incredibly user friendly and attractive.

Borders Features:



Borders offers a number of features that should appeal to customers, including

• Free shipping available on orders of more than $25

• Easy access to Borders store locator

• Lists of New York Times bestsellers and new book, music, and DVD releases

• Ability to take a sneak peek at the content of some of the books

Conclusion

hi5 has a very specific and strong business model that will bring the company continued success in the future. The site is growing every day in many categories and is drawing more and more attention.



References



• http://wn.com/social_networking_site

• http://www.hi5networks.com/advertise/audience.html

• http://social-networking-websites-review.toptenreviews.com/facebook-review.html

• http://www.starreviews.com/online-bookstore-reviews.aspx

• http://www.mphonline.com/books/bookcomm.aspx

• http://online-bookstores-review.toptenreviews.com/amazon.com-review.html