Business Models in Social Networking

Abstract

Facebook was launched in 2004, YouTube in 2005, and Twitter in 2006. They are thus very new service platforms but they already have millions of users and their valuation is counted in billions of US$. This is an extraordinary development, which one will not find in any other line of business, and it illustrate the power of network effects, where the utility of the individual users depends on the presence and usage of the network by other users. The cases described in the present paper are clearly examples of web 2.0 services, where the services provided by the networks are dependent upon content created by the users. The paper is developed as part of the CAMMP project (http://www.cammp.dk) funded by the Danish Advanced Technology Foundation (Hojteknologifonden).