an economic Problem for Dummies! Todays problem: The Social Network's business prospects!

What’s with all of the Buzz around the Social Hive?

The recession has hit the world’s economy hard. Except on area seems to have slipped the net, that is the social network. Sites like Twitter and Facebook are on the rise and it seems there is no stopping them! With Facebook looking to raise over $10billion for just a small portion of it’s shares when it begins its flotation on the stock market this year, the initial bedroom project of a teenage student seems set to take the world’s largest banks to school. Although, what does this new craze have in store for the world’s economy?

Mark Zuckerberg the teenage visionary behind
Facebook has big plans for the future of social networking!

The rise of social networking is set to have profound impacts on the world of business with, aside from the many advertising opportunities, its ease of sharing making opinions on firms widespread in seconds. This allows for boycotts or promotions of all sorts through the consumers themselves. It’s like a personal recommendation on a global scale. Now liking Coca Cola is telling people that that’s your soft drink of choice and will in turn influence your friends, who will influence theirs and so on.

The like feature, among others, allows firms to break down the walls between them and their customer base, they can target them directly with the use of their info, which is the main form of Facebook advertising, and when someone does like a company they are allowing the company to bombard them with info. Barriers aren’t just broken down in the sales department but also the customer service, now companies can search for their name and see in what context it’s being used in. They can then respond to this accordingly. It’s also got potential for large scale polls and questions with millions of users it’s essentially potentially a way into the internet literate world! There are company’s who embrace this, like Best Buy, who have a team dedicated to responding to whingeing tweets, essentially giving a public demonstration of customer service, something that was normally on a person to person basis, now the world can see how they handle the situation.

An Example of Facebook advertising at its most subtle!

But with great power comes great responsibility, and sure enough it was social network sites that helped organize the England riots last year, which was responsible for thousands of pounds of loss for many firms nationwide. It was also responsible to a lot of the revolutions in many dictator controlled countries last year, with it being a way outside of national control to organize protests with one another. This same principle can be applied to most businesses. Boycotts and protests against certain companies can be organised in seconds and one’s opinion can be seen by their thousand odd friends and in turn influence them. Now rumours and bad press have an even wider effect. Plus, this is only set to increase with Zuckerburg’s 2012 aim to get the world sharing even more!

Basically, social networks will become increasingly important and firms will adapt with the times, aiming to seek out the benefits, increased advertising, customer service and good public opinion, while trying to drown out the negative opinions and public outcries caused by the army of regular consumers. Now the world is getting less controlled by large corporate giants and more by the average person on the street and it’s exciting to see whether this is a good thing or something terrible!

p.s. sorry these last few posts have been a bit late, but I am back at school now so am struggling to keep up the regular posts, so will probably make them less regular.