Impact Of Social Networking On E Business Information Technology Essay

Social networks have changed the way internet users communicate, search for and share data today. For example, increasing the relations between e-businesses and social networks can improve user satisfaction.

Using data from blogs, forums and online journals, the evaluated impact that social networking has on e-businesses and e-commerce sites. The results show that while the majority of users do engage in social networking, those e-businesses and e-commerce site that transact with the social networking sites generally obtain significant benefits in the form of product promotion, branding and higher user satisfaction that the ones that don’t. This is clearly shown by the illustration and graphs shown in this research paper.

Introduction

In its early years, e-business was used for uploading basic information about products and services and now it provides corporate information on sites that sell goods and services on the internet. If compared to e-commerce, the purchases made online are unlimited. E-commerce involves online financial transactions

Top social networking sites like Facebook, Hi5, Friendster and MySpace have made a significant impact on how today’s internet users communicate, search and share data. Users join these social networks, publish and maintain their own profiles by using publishing tools, they also establish links to their friends. The social links are evidence that trust has been established between the connected users.

The marketing strategies of social networks can have a huge impact on e-business, for example, users can become members of both the social network and e-business. For example, users who buy or sell items on Ebay can leave links of their products on their MySpace account. To guide their financial decision-making, the social networks and e-business offers users information

on how they are connected to each potential transaction partner.

Since majority of internet users engage in social networking sites, those who do business with friends of friends end up benefiting from higher user satisfaction. The analyzed results show that social networking has a positive impact on e-business.

Outline of the paper

This paper is organized as follows:

Section 2: Introduces Social Networking

Section 3: Introduces E-business

Section 4: Introduces E-commerce

Section 5: Outlines the impact of social networking

on e-commerce and e-business

Section 6: Conclusion

Social networking

Social networking has always been known for its interactive communication with online participants who are brought together electronically to share views, upload images and so many other features.

Social networking is free and all it takes is commitment, it has a short learning curve and provides access to global market.

TagWorld social site was the first to embrace e-business and that has revolutionized social networking, it has also given them a competitive advantage over their rivals like MySpace and Facebook.

TagWorld members can post items for sale in the new classifieds section, which can be searched by tag — similar to a subject or catagory, keyword or zip code radius. Multiple images of an item can be included with the ad, as well as a payment model. Sellers can choose a fixed price or mark the item negotiable — which allows buyers and sellers to haggle over a price.

PayPal is integrated into the site to make paying for items easier.

Items appearing in the classifieds can also appear in storefronts that members can incorporate into their personal Web pages.

Mello (2006)

T

[8]Below is the size and growth of the top social networking sites.

Profiles

12 months Growth

Hi5

98.9m

33.6m

51.6%

Facebook

50.1m

n/a

n/a

Friendster

50.9m

19.6m

62.5%

MySpace

184.1m

82.7m

81.5%

Size & Growth

There are two types of social networking services they are, internal and external.

Internal Social Networking

These are for private communities like companies, organizations or associations. Most companies want their staff to stop using external social networks since its unproductive, so they block the external social sites.

[2]Their staff can communicate with each other or even with different departments.

[1]External Social Networking

This is a public network, where all web users can access it. Most social networking sites are used to attract advertisers. A good example is Facebook, Hi5, Friendster and MySpace.

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Social Networking Analysis

This is the mapping and measuring of

relationships between people. It is used

for the analysis of social structures.

A good example of a social networking analysis tool is the Sentinel Visualizer product [5]. The tool is used to measure the degree of centrality, betweenness centrality, closeness and

Eigenvalue.

Degree centrality

This is simply the number of direct relationship that a user has. If a user has more relationship, he or she is an active player in the network as shown below.

In the above illustration, Alice has the highest degree centrality, which means that she is quite active in the network. For her to get to Rafael’s clique she has to go through him [5].

Betweenness Centrality

This identifies a user’s position within a network in terms of their ability to make connections with other groups in the network. The user with a high betweeness centrality has a big influence in the network as shown below.

In the example above, Rafael has the highest betweenness because he is between Alice and Aldo. Alice and Aldo have a slightly lower betweenness because they are essentially only between their own cliques.

Closeness

This measures how fast a user can access more users in a network. A user with a high closeness has a high visibility as to what is happening in the network.

Eigenvalue

This measures how close a user is to other highly close users within a network, this is measured globally.

Some companies like SAS Institute have come up with a system called SAS® which detects and prevents fraud on social networks [4]. The same system measures productivity and provides other information to help manage the site efficiently and effectively [4].

E-business

This is basically a way of conducting business electronically. E-business involves business processes like electronic purchasing and supply chain management, processing orders electronically, handling customer service, and cooperating with business partners.

E-business involves a business cycle of production, sales, procurement, distribution, payment and marketing so it’s not hard for it to work for any business. There are several applications that can benefit e-business, these are blogs and forums. These will show the e-business how its users like their products by viewing their comments.

E-commerce

This basically means conducting business electronically, mainly via the internet.

E-commerce has impacted sectors in governments such as the cultural and information sector. Another industry that may have a large future growth via e-commerce is banking. With the continuity of ecommerce, there will be futuristic issues like social, economical and privacy. Most of the internet users fear buying from online businesses since they often have limited guarantee about the privacy of their information. If such problems are resolved, e-commerce can play a positive role in improving the world business.

Some applications that are used in e-commerce are email, online banking, teleconferencing and newsgroup. With e-commerce, users can conduct business anytime, access the global market, allow customers self service or customer outsourcing.

There are constraints of e-commerce, they are:

Time for delivery of physical products, e-commerce is often used to buy goods that are not locally available thus taking time and money, this is due to the buyer and seller being from different countries.

Physical product supplier & delivery uncertainty, most of the time e-commerce purchases are made on trust. This is because having access to the product physically is not possible, a purchase is made on an expectation of what that product is and its condition.

Another reason is that supplying businesses is conducted across the world, a user or buyer cannot be sure whether or not the supplying businesses are legitimate and are not just going to take his or her money.

Perishable goods:

Goods bought and sold through the internet tend to be durable and not perishable, they need to survive the trip from the supplier to the purchasing business or consumer.

Limited and selected sensory information:

Whatever a user buys, all they can see is the images of the product and its description. They cannot smell, weigh or even inspect it as they would if it was in a local store.

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Returning:

Returning goods online can be difficulty since most e-commerce business has stated that in their return policy.

Privacy, security, payment, identity and contract:

Most of the time e-commerce businesses have issues of privacy of information, security of the same information and payment details.

One would think that the availability of goods online would increase competition and lower prices, but this doesn’t always occur. A good reputation may allow a seller or a retailer to control his or her area of market.

[7] Below is a diagram of the complaints made by Australian’s e-consumers:

Impact of social networking on e-commerce and e-business

E-businesses and e-commerce sites cannot compete in today’s market without collaborating with social networks. There are several impacts that Social networking has on e-business and e-commerce, such as economical and social impacts. These are shown below:

Economical Impacts

One of the main advantages social networks have is millions of users, e-businesses and e-commerce sites have come up with ways of pulling or attracting those users to their sites. For e-businesses and e-commerce sites to actually benefit from social networks, they need to use the following marketing strategies:

Driving internet traffic for ad revenue

Brand building

Link building for traffic and Search engine optimization

Promotion of goods and services

Affiliate Marketing

Pay Per Click Advertising

Driving Internet Traffic for ad revenue

Driving traffic to a site is very inexpensive. Hence, e-commerce and e-business sites have to be attractive with rich contents so as to ensure user interactivity. This strategy will benefit both the social networks and the e-business/e-commerce sites.

Benefits of Driving Internet Traffic for ad revenue:

It is far better than pay per click as you already direct viewers to the page

If an e-commerce or e-business site uses this strategy, it will be able to view their competitors, their products, services and their current strategies

Link building for traffic optimization

E-businesses and e-commerce sites can place links in social networking sites which will actually boost the traffic of their websites.

Benefits of Link building for traffic optimization:

This strategy can help e-business or e-commerce sites build trust by having multiple one-way links to their sites.

It is a cheap way of driving traffic to the e-business or e-commerce sites.

Promotion of goods and services

This can be done by providing information to educate clients about the products. The information can be promoted by advertising on social networking sites.

Benefits of Link building for traffic optimization:

Clients have a better understanding of the goods and services.

Goods and services can be commented on or criticized by clients.

Affiliate Marketing

This is one of the most efficient methods of promoting the e-business or e-commerce sites. Affiliate marketing is risk free since its marketing costs are only paid for actual results.

This method eliminates the need for having an advertising budget or employees since the cost of using the affiliate marketing method is commission based.

Benefits of Affiliate Marketing:

This strategy allows the e-business or e-commerce to track visitors, this helps in

E-businesses and e-commerce sites have access to a wider audience thus generating more goods and services.

Pay Per Click Advertising

This is a type of advertising where the advertiser pays depending on the number of times the published ad is clicked on. It is a very effective way of targeting specific users and it also provides a reliable way of measuring the effectiveness of the advert.

Benefits of pay per click advertising:

It targets users more accurately

It can show what keywords users have clicked on to view its site.

It is also simpler in targeting users who live in different geographical spots.

The economical impact on e-business and e-commerce helps in building credibility. It is easier for the e-business and e-commerce sites to gain client’s confidence if they connect with them on a personal and professional level.

Social Impacts

When it comes to social impacts, this mainly refers to productivity of employees in e-business and e-commerce sites. This is the biggest concern in e-businesses since it can lead to network security risk and damage to reputation.

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“Negative employee blogging or inappropriate posts about the workplace on social networking sites presents a new, confusing and often very daunting challenge for many smaller employers,” said Jackie Breslin, director of human capital consulting for TriNet. “Business owners need to stop and ask themselves some important questions regarding their employees’ personal online usage of this growing technology in order to safeguard the company’s reputation and protect themselves from liability if legal and harassment issues arise.”

Justin (2008)

The solution to this problem is internal and an external custom social network. These are organizational or private social networks where only staff members and clients have access. This improves teamwork, collaboration and productivity within the staff members. When it comes to clients, it will improve loyalty and retention and most of all, increase the response time for enquiries.

There are several negative impacts that social networks have such as Technical threat, online scams, cyber-stalking and identity theft. Malicious users are constantly trying to post or load their contents containing [6] browser exploits and then convinces users to view their contents. They also post scripts on the social networking sites that will run inside the browser of the users that view the content. A good example of this is cross-site scripting, this is basically a security exploit in which the attacker inserts a malicious code into a link that appears to be from a trustworthy source.

Once a user clicks on the link, the embedded code is submitted as part of the client’s web request and it executes on the user’s computer thus allowing the attacker to steal information.

But the technical threat has preventive methods such as filtering scripts, and updating the web applications, antivirus and antispyware.

The solution that millions of internet users trust is Secure Socket Layer certificates. A social networking site has to have a Secure Socket Layer installed for it to safeguard its members. The same applies to the e-business and e-commerce since the solution will ensure that clients’ online payment information will be submitted securely to its payment gateway and merchant account, it will also protect the website in case payment information is compromised.

Secure sockets layer has other advantages like:

It encrypts important information.

Each secure socket layer certificate has unique, authenticated information about the certificate owner.

SSL is used only where sensitive information is exchanged in order to provide privacy/security. So it’s a must have for both the e-business and the e-commerce.

This means that secure socket layer certificate have no negative impact or disadvantage since it’s only used to encrypt important or vital information.

5. Conclusion

While this research paper presents an evaluation of the impact of social networking on e-business. It seems that social networks have positive impacts on e-business even though some threats have been identified, such as security and privacy.

Privacy has the most negative impact since almost all users write things about themselves which they wouldn’t have in a social meeting.

This makes it easy for hackers and malicious attackers to target them. Even with the integration of the social and e-commerce users, this has still created a new target for hackers and malicious attackers. Since e-commerce users post links in their social network account which will redirect anyone who clicks it to the product’s page in their e-commerce account, you may find that fraudsters or even hackers will place links that will actually give them access to information of both the e-commerce and social network accounts of the targeted user.

It would have been better if further understanding of the structural differences between social networks and e-business were made. The observed differences could be attributed to the e-business’s nature of the network transactions, a further user behavior analysis on e-business or e-commerce could be carried. The findings could better the understanding of the motivation of the users socially and business wise.

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