How Social media is changing the dynamics of group buying

Group buying is one of the latest trends on the internet which has caught on like wildfire and I admit not to have been untouched by its reach. To give a background on it ,what it essentially means is that group of consumers come together and leverage their power of group size in exchange for discounts. One of the biggest players in this area is Groupon based in Chicago.Currently Groupon offers one deal per day in each market it serves. If a certain number of people sign up for the offer, then the deal becomes available to all and if the predetermined minimum is not met, no one gets the deal that day. This reduces risk for retailers (restaurants, bars, gyms) who can treat the coupons as quantity discounts as well as sales promotion tools. Groupon makes money by getting a cut of the deal from the retailers.

Now how does social networking fit in to all this? Previously companies like groupon used their own websites and word of mouth advertising for spreading the news on their deals, but recently they have started using Facebook & other social media to help people find deals that may interest them by geography, then share these deals on the their Facebook wall or twitter feeds allowing everyone in their friend network to see it and make comments, like, and do other things. This kind of viral marketing is taking the social interaction to the next level by potentially inviting a user’s entire Facebook network to get in and take advantage of the deal. The fact that the offer will disappear if there are not enough customers creates a sense of perceived scarcity which further fuels the fire to get hold of the offer . Also it has been scientifically verified that people are generally more inclined to buy stuff that their friends have recommended them. Apart from posting deals and promoting their web site, Groupon is also encouraging more interaction from the fans on their facebook page in terms of sharing tips on saving money.As per Compete(site which analyzes traffic data) over 41% of all the incoming traffic to groupon is through facebook, which clearly highlights the role it plays in making a deal reach to the end customer.

Janet Paskin, the managing editor of Bundle, a website devoted to tracking consumers and their relationship with money, recently wrote about the addictive nature of the daily hit and how people end up buying coupons for services which they don’t need but just because such a deal offers savings. Some critics have noted the possibility of an erosion of customer loyalty and the danger that small businesses could be buried by an overwhelming response. I believe that in today’s world of online retailing the finicky customer will only go to a place which offers him the best price and no retailer should be under the assumption that he has loyal customers forever. At the end of the day, the customers are only loyal till you have them attracted by your discounts and schemes and then they are gone. Besides it gives smaller companies a launch pad to scale up their operations and increase their customer base. They need to make full use of a platform like this. To answer Janet’s question, I feel that in current recessionary times, these kind of deals are playing a very significant role in boosting the consumer spending by making people to purchase more thus giving a push to the entire economy.

I would like to further emphasize the pivotal role of social media in enabling collective buying by giving two examples:

1. Phoenix Suns forward Amar’e Stoudemire has teamed with AtCost.com and Razorgator Tickets to turn his Facebook Page into a group buying hub where fans can purchase discounted playoff tickets. The fact that an individual athlete or celebrity can drive bulk ticket sales via Facebook is quite unique and unheard of.

2. Walmart has also jumped into the group buying space through a new app on its Facebook Page called Crowdsaver. All WalMart is asking people to do is to “Like” its deals on Facebook and once a deal gets to the required number of Likes, the deal is live.

In times to come we can expect to see more companies/individuals using the social medium to reach the end consumers and provide them with good discounts. Over the last year many group buying websites have come and gone but Groupon’s connection to social media is turning it into a revolution and it is here to stay.

http://www.chicagomag.com/Chicago-Magazine/August-2010/On-Groupon-and-its-founder-Andrew-Mason/index.php?cparticle=2&siarticle=1#artanc

http://www.insidefacebook.com/2010/01/27/livingsocial-deals-groupon-make-coupons-a-social-experience/

http://www.facebook.com/groupon#!/groupon?v=app_4949752878

http://ryanspoon.com/blog/2010/05/31/groupons-facebook-widget-includes-referral-invitations/

http://thenextweb.com/us/2010/10/27/walmart-now-doing-group-buying-on-facebook/

Social Network Analysis for Open Source Software (OSS) Communities

What is Open Source Software (OSS)? Over the last few years, there has been a world of change in the way software is made available to users. OSS, essentially means that the source code of software is made available directly and freely to everybody and thousands of software programmers come together in what are called OSS communities to spend tremendous amounts of time writing and debugging the software with no direct monetary benefit. The effects of the OSS movement have been far-reaching. It has now started to become incorporated into the strategies of large corporations, who cannot afford to directly compete against software that is usually free to use. Hugely popular products like Mozilla, Linux etc are direct results of OSS collaboration, which suggests that the importance of the communities that come together to create this software cannot be ignored.

Open source software development teams, are generally comprised of volunteers working not for monetary return, but for the enjoyment and pride of being part of a successful virtual software development project. Team members often come from around the world and rarely meet one another face-to-face. The open source projects are self-organized; employ extremely rapid code evolution, massive peer code review, and rapid releases of prototype code. But often, these open source software groups are comprised of generally unaffiliated individuals and organizations who work in a seemingly chaotic fashion and who participate on a voluntary basis without direct financial incentive. One of the most commonly used terms with respect to OSS communities is “Knowledge Collaboration”. Knowledge collaboration is the key to the success of OSS communities as often, not all members have the knowledge and skills necessary for professional software development. Usually, OSS members communicate through virtual communication channels so that geographically distributed members can collaborate and coordinate their work.

One of the newly applied methods to analyze the communication in OSS communities is Social Network Analysis (SNA). SNA allows analysts to look at Actors as nodes, and to visualize the links between them so as to understand the communication between them. They also study such concepts as Degree Centrality, Betweenness, Degree Coordination & Centrality Eigenvector. The main target of these procedures is to understand who the key communicators within the network are, who the knowledge brokers are, and who links the peripheral members to the central actors. The goal of this analysis is to visualize the communication within the network, to analyze how and why some OSS communities operate more efficiently than others, and to streamline operations of other less efficient OSS communities. Within successful OSS communities also, the visual networks make it easy for the team members to train new members about the culture within the OSS communities. Thus, the application of SNA in OSS communities is becoming very important. Over the last few years, many such studies have been conducted and published. Studies, which analyze the knowledge collaboration within the community, the direct communication between members etc. A list of some published papers on such studies is mentioned as part of the sources for this post as below.

Most often, data is collected by selecting certain OSS communities (most often selected from www.sourceforge.net) by using mailing lists and surveys. The data thus collected is then analyzed using SNA programs such as Pajek or UCINET. Interestingly, some open source SNA software packages also exist! Finally, conclusions are drawn based on the visual networks that are derived from the software. The data thus collected may be used by the communities themselves in order to streamline their operations or by other communities to change the way they operate.

Though many positives can be gained from using SNA to analyze OSS communities, there do exist certain problems and limitations. These are not often publicly spoken about, but do exist. The primary problem being privacy. Information used for SNA is, as mentioned before, gained through surveys and mailing lists which require users to input their basic information. From personal experience, I have been able to gather that, in some cases, contributors to OSS communities are professionally attached in the realm of software development, to companies competing directly with the same communities. These members are, as a result hesitant to divulge direct information, for fear of being linked to the community by the companies. This problem has been spoken about by Nelson Ko, who leads Citadel Rock Online Communities Inc. Mr. Ko often speaks about SNA and OSS communities. Another limitation of such studies is that all members may not contribute to the surveys, and thus, information may be incomplete. Incomplete data, would give incomplete results.

Considering the above issues, there exist limitations to the application of SNA for OSS communities, but I personally believe that these problems are outweighed by the inherent advantages. The possibility of streamlining OSS communities to provide better quality and FREE software to users is a big motivating factor. Making high quality software available to lower income communities and economically developing regions that often are unable to access licensed software is another factor that must be considered while taking a decision on the subject. As a result I believe that the advantages of using SNA to make OSS communities operate more efficiently compensate for the innate negatives that come with it.

Sources:

1)http://www.aswec2008.debii.curtin.edu.au/ResearchSlide/Open%20Source%20Communities%20as%20Social%20Networks.pdf

2) http://se.naist.jp/achieve/pdf/171.pdf

3) http://nlp.uned.es/~juaner/papers/juaner08-oss.pdf

4) http://digitalcommons.fiu.edu/cgi/viewcontent.cgi?article=1062&context=etd

5) http://www.slideshare.net/nkoth/social-network-analysis-in-open-source

6) http://perso.univ-rennes1.fr/eric.darmon/floss/papers/VICENTE.pdf

7) http://page.mi.fu-berlin.de/oezbek/pub/OezThiPre10-SNA.pdf

8) Greg Madey, Vincent Freeh, Renee Tynan, “The Open Source Software Development Phenomenon: An analysis based on social network theory”; 2002 . Eighth Americas Conference on Information Systems.

:Yatin Mulky

Should we block Facebook, Twitter or other social networks?

Should we block Facebook, Twitter or other social networks?

Half of small and midsized firms don't let staff visit social networks such as Facebook and Twitter from a company-owned PC or laptop, says Webroot ( the online survey of businesses with 500 and fewer employees between Oct. 29 and Nov. 3; 1 087UK and US respondents)[1][2]. 42 percent have implemented an Internet use policy with strict rules as a result of an employee's inappropriate use of a social networking site.

Over a half of firms are concerned about malware infections via social networks and 42 percent worry about data leakages caused by social network use, with 12 percent admitting sensitive company info has been leaked via this channel.

The combination of policies, policy violations, the usage monitoring and malware fears has led to the next results[3]:

· 39% prohibit employees from visiting Facebook

· 30% have banned employee access to Twitter

· 27% prohibit YouTube and video-sharing sites

· 21% restrict employee social network access to specific times of day (breaks, meals, after work hours

This is a hot topic that is discussed in every company now. Decisions should be taken very seriously with pros and cons discussed in every case individually.

Why one do that?

Today, often in the lag of policy, social networking has employees toggling between “friending” on Facebook, Twitter, etc. one moment, and “businessing” on corporate systems the next. Switch between “friending” and “businessing” can pose an extreme peril to any organization’s nr. 1 asset – reputation – in an age that grants enormous power to individuals. For example, Genesis HealthCare System, of Ohio, recently had to counsel healthcare professionals not to make negative postings online; personnel were discussing patients and referring to them by room number. Going the other way, employees too often have the temptation to bring an inappropriately lighter sensibility to business communications, having just exited the “party” of social networking.

Webroot recommends organizations thinking of permitting access to social networks determine who needs access to the sites in order for the company to be competitive.

Situation highlights the need for everyone to have a much higher data security awareness. The majority of breaches are due to human error, therefore awareness and common sense are key, in supporting all necessary best practices[4].

Why one can be wrong doing that?

In the case of small businesses, many find themselves taking advantage of social networks in the interests of client-building, marketing, communication, and general exposure. This is inexpensive and efficient.

I personally think that “blocking” will not be the best solution to a problem and just an illusion of security. That every company needs to develop a policy for social networking use and should also deploy reliable Web security services for ongoing protection against threats as it happened ones with e-mails. Adding necessary precautions and education as well.

Sincerely, blocking is not a solution at all. “Social[5]” people use Facebook “”24/7” and beyond the working hours. I see my admin and secretary building “superior” farms even Facebook being blocked by IT guys. Being blocked one may feel discriminated, anger and will find the way to circumvent the ban.

As well, it is much easier to spot a disloyal person who rants or vents about the job in a bad way from in the internal business network.

I found a report from the Network Box shows that 6.8 percent of all the URLs accessed by businesses goes to Facebook[6]. Blocking social networks is pointless, embracing them is crucial.
Social Networks are very often sources creativity and happiness.

One question to answer. If companies blocks access to pages, does it mean they do not trust their employees to be confidential, work when they should and maintain privacy. How much you trust your employees?

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[1] http://www.eweek.com/c/a/Midmarket/Half-of-SMBs-Block-Employee-Access-to-Facebook-Report-571853/

[2] http://pr.webroot.com/web-security/ent/research-shows-half-of-smbs-block-employee-access-to-facebook-111510.html

[3] http://www.informationweek.com/blog/main/archives/2010/11/facebook_twitte.html;jsessionid=
PR04C2Z3EP3U5QE1GHPSKH4ATMY32JVN

[4] http://itknowledgeexchange.techtarget.com/IT-watch-blog/social-networking-and-the-blended-environment-what-is-being-done-in-the-name-of-your-domain/

[5] http://www.smh.com.au/digital-life/digital-life-news/facebook-now-ingrained-in-relationships-20101116-17v1n.html

[6] http://www.scmagazineuk.com/facebook-and-youtube-dominate-workplace-traffic-and-bandwidth/article/168082/

Social networks can save the football team?

If your favorite football team is in bad situation in the league,
and you want to change the owner of the team, what will you do?
Recently there was a news article in Wall Street Journal.
It was about the famous English Premier League Foot ball club – Liverpool FC.
At that time, the owner of the team was Tom Hicks who was American(!).
Liverpool’s fans did not like the owner and the team was not in good position in the league.
Therefore, Liverpool’s fans did want to change the owner.
Before the time of social networks,
traditional way for the fans to make the owner of football club get out of that position was threatening with knives and broken bottles.

However, Liverpool fans use very smart method – using social networks to keep him from funding so make him out of money.
It worked like this.
If someone found that the owner went into the bank and met some people in the bank, he or she posted in his or her facebook or tweeter about that, then a lot of people bombarded the bankers who were in charge of lending money with emails.

Now, shareholders (which can be the fans of foot ball team) can do same to affect management decision and even the financing of the company through social networking.
There are some pros and cons about this new possibility of social network to the corporate management and in capital market’s point of view.

Pros

1. Social networks can be the good solution for information imbalance.

The basic assumption of capital market is that market is efficient,
and capital can be invested in optimal way when the market is efficient.
However, information imbalance in the market can cause market inefficiency.
Social networks can be the solution for this through providing more information.
Shareholders can get more information through the social networks as fans of Liverpool FC could know that the owner wanted to get new fund from the bank.
Through the rule of six degree, people can get information about the company even from the insiders.
Even this is the reason why some companies try to prohibit their employees to use social network services.
However, there is more chance to get information and this can be the one good solution for information imbalance.

2. Small shareholders and stakeholders can make their voices through social networks.

Social network is very effective communication and collaboration tool with other people who share the ideas.
Agency problem is very serious problem nowadays.
Small shareholders could not make their voice to the companies’ management’s decisions in the past.
However, social networks can make it possible for people to deliver their opinions and act to change the management team as we can see the case of Liverpool FC.
The increasing power of people through social networks also can prevent the company from wrong doing e.g environmental pollution.

Cons

1. Rumor can affect negatively to the capital market

One big problem of the social network would be the danger of unproven information.
For the company’s point of view, negative rumor affect hugely to the company.
There is a lot of wrong information and social networks increase the speed of spreading this information.
It can cause huge disaster to the company and as a market.
The information decreases the efficiency of the market.

2. The danger of “Popularism”

The increased power of the public can make the decision based on public’s preferences.
In recent bailout plan of Ireland gives some insights for this fact.
Ireland’s people do not want to get bailout but if not, it will cause bigger problem to the economy.
Sometimes, it is necessary to act against the will of the public.
However, the social networks can cause “Popularism” in the economic policy.

Let’s go back to our first question.
Can social network save the football team?
Actually, the owner was changed but Liverpool FC is still ranked 10th in Premier League.
We cannot decide the social network work better off or worse off for the team yet.
However, it is true that social network gives more possibilities to correct problems of the companies and economy as a whole.
The dynamic flow of information among people through social networks will be the power to solve the problems of side effect of bad information and popularism.

References

http://online.wsj.com/article/SB10001424052748704814204575508070757773784.html?KEYWORDS=liverpool+tom+hicks

http://www.mccombs.utexas.edu/news/research_calendar/FIN_Kuhnen_1_30_06.pdf