A study on business models of Social Networking

sites & Analysis of their failures

Under the Guidance of:

Submitted By
Rakesh S K
15A3HP611
Management Project-2

Prof. Debandra P Kar

Professor
IMT Hyderabad

12-December-2016

Introduction:
When discussing advertising and marketing strategy today, the discussion would be incomplete
without considering the use of social media the emerging channel of social networking marketing.
What is social media and why should companies be considering establishing a presence in social
media?
The number of people who use social media is always growing rapidly. Given this tremendous
growth, companies are scrambling to try and figure how to utilize social media to reach the
millions of consumers who use it daily. Business organizations are readily exploring how to
incorporate social networking in their business models to better utilize social networking
marketing for cost-effective, targeted marketing and reputation management. Business social
networking tools such as Facebook, Twitter, YouTube and LinkedIn are being used by
organizations to connect with customers and help market their products in both b2c and b2b
environments.
This paper examines how these social networking companies do business and earn revenues in
their marketing and advertising strategy by content analyzing. It appears in the present business
world most of the companies have recognized the need to establish a presence on social media
which is driving the growth of these social networking companies.
Primary Objective of the Research:
The main objective of the research is to analyze different business models of social media
companies and to analyse their failure points.
Several studies have been conducted on social media by the scholars but my study has been
conducted on the subject, specifically in context of the business models and their failure points.
Therefore, the focus of the present study is on studying the various avenues of revenue earnings
and business strategies adopted by these social networking sites, evaluating the effectiveness of
their strategies by analysing their performance and the failure points in their business performance.
Proposed Methodology:
To meet the objective, a detailed study of major social networking sites will be done through the
secondary research. The business models will be studied through the secondary research by
analysing the available data from credible sources. To identify and analyse the failure points,
primary research will be conducted in IMT-Hyderabad by floating a questionnaire to the people
who are using these social networking sites.

Data Collection:
The present work will be an empirical research based on both primary and secondary data. The
theory will be developed from secondary sources of information and a thorough study of various
academic works in the field that has been attempted. Various other sources that will be used for
the purpose are the records of the sampled magazines, books, articles that appeared in journals and
newspapers, study reports etc. on the subject particularly for formulation of the problem and to
compare the respondents perception about the performance of these sites.
A questionnaire will also be used in collecting the primary data which will be used to analyse what
the people look for and what these companies are providing, through which we can identify the
failure points.
The sample size will be 150, respondents will mostly be from IMT-Hyderabad.
Managerial Implications:
The study will help the upcoming startups in this industry to study and understand the various
business models and their applicability in their startups. This will also give an understanding of
the effectiveness of their marketing strategies and its impact on the users. The possible gaps or
their failure points that will be surfacing once the research is done will provide the companies a
base to formulate their future business strategies.
Limitations:
It should be noted that the current research is also bound by several limitations, which can be
turned into avenues for further analysis.
There are limitations in the information. In addition, this research will be concerned with few
organizations under study and thus it is hard to establish whether the marketing strategies also are
same in other organizations. Although this will be checked with the extensive literature review.
The small sample size should be noted also. The sample of the study is relatively small and to
certain extent confined to Hyderabad that poses difficulty in generalization of results.
Timeline of the Research:

12-December-2016

Research Proposal

09-January-2017

Interim Report

13-February-2017

Final Report

References:
Parsons, Amy. (2013). Using social media to reach customers: A content analysis on
Facebook page. Academy of Marketing Studies journal, Volume 17, Number 2.
Case, J Carl., Ryan, S Kristen. & King, L Darwin. (2015). Marketing Social Networking
in the Fortune 500.. Business Studies Journal, Volume 7, Number 2
Heisen, Shu., Hsian, Pei-Yuan & Wu, Guo-Liang. (2014). Mining user knowledge for
investigating the facebook business model; the case of Taiwan users.. Department of
Management Science, Tamkang University, New Taipei City, Taiwan, ROC
Internet articles:
Business Models for Social Media Startups- http://articles.bplans.com/5-business-models-forsocial-media-startups/
Revenue Models for Social Media Startups- http://www.startupfreak.com/10-revenue-modelsfor-social-media-startups/