Marketing Academics Pt.4

Marketing Academics Pt.4

Social Networking: Financing and Marketing Imagination

Though the assumption that readers of this report understand what social networking is has been made, a brief overview that provides a view of a social network’s simplicity rather than the technical complexity may be helpful. Further, using one’s imagination, the following explanation may add fuel to the fire of commercial possibilities. Social networks are based, in part, on the theoretical model known as Six-degrees of Separation. This theory holds that every human (acting as a network node) is separated by no more than four other people [hops] between the connecting parties (Watts, Duncan J.) This process is facilitated by lateral diffusion, which is analogous to the spreading of rumors, disease, or jokes. The obviously unique advantage that the lateral diffusion of an online social network has is that transmission is digital; that is, information does not mutate like a disease or even a joke.

By the numbers, as of April 2006, the ten biggest social networking sites had a combined 68.8 million users, drawing in 45 percent of active Web users [in the United States] (King, Rachael). In 2007 alone, venture capitalists invested about $250 million into 34 different social networks; in a separate investment, Microsoft purchased five-percent of Facebook for $240 million (Ante, Spencer E. It is without question that social networks will soon move to the forefront of marketing communications.

Functionally, for a social network such as Facebook (Appendix 1), if everyone had ten unique friends, then six-degrees would build a network where every node on the network could connect to one-million other nodes (people) with only six nodes in total being activated. To reach the entire world population within six-degrees, then each person would need about 43 unique friends. Simply, 436 equals 6.3 billion. Ignoring factors of the probability of such an efficient network existing (one with no redundancy), it is apparent that the customer service and human resource function can gain considerably from a global scan at the click of a mouse. In theory, Kiwi Products, the makers of Kiwi shoe wax, could find the 127th best shoe shiner in Cairo, Egypt with six or fewer queries. Currently, the reality is somewhat less efficient.

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