Social Applications: Revenue Models, Delivery Channels, and Critical Success Factors - An Exploratory Study and Evidence from the Spanish-Speaking Market

Marcelo Nogueira Cortimiglia,Filippo Renga,Antonio Ghezzi

doi:10.4067/s0718-18762011000200010

Abstract

In the context of growing interest in both Mobile-Internet convergence and Web 2.0 social technologies, this article investigates the business opportunities derived from offering Social Applications in the convergent scenario, particularly regarding Social Network and Content Sharing services. Given the business model structural deficiencies identified in literature for this type of convergent services, the investigation is oriented towards the role of the technology delivery channels (either Internet and/or Mobile) and revenue appropriation strategies. A mixed-methods research strategy was employed consisting of a cross-sectional survey of 124 Social Application services offered in Spanish language and seven case studies with representative Social Network and Content Sharing services. While the aim of the survey was to map and identify the overall main characteristics and business model dimensions of Social Applications, the case studies' objective was to understand the strategic reasoning behind business model design and evolution. The research offered a detailed view on the dynamics of Social Network and Content Sharing services, showing how the revenue strategies are tightly linked to the technological delivery channel. Finally, six critical success factors for business models of Content Sharing and Social Network services were identified.

Highlights

The diffusion of mobile technologies all over the world in recent years is undisputed
Approximately 40% of the surveyed Social Application services that can be used on both channels have some kind of locationbased feature, a figure that rises to 65% when considering only the Social Network and Content Sharing categories
The high number of Social Networks can be explained by the recent hype of this type of Social Application, which may be argued to be experiencing an experimentation period

Summary

Introduction

The diffusion of mobile technologies all over the world in recent years is undisputed. A particular topic that has been gaining importance over the last few years is that of the perceived shift of Mobile Telecommunications' focus from voice transmission to data transmission (and related value-added applications and services) [9], [11], [23]. Among mobile value-added services, Internet access is perhaps the most relevant business opportunity nowadays as it lays at the center of the Mobile-Internet convergence trend in act. According to recent estimations the number of mobile broadband subscriptions will surpass 1 billion by 2011 [42]. It seems that Mobile Web has reached, or is in the fringe of reaching, a critical mass of users to support large scale business models

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Conclusion