Business Models of Social Media

A business model is the way in which a business makes money by creating leads or sales for another linked company's site.

For example, Facebook Inc's business model generally includes selling user's data to advertisers with the intent of making large profits for minimal operating costs. They can achieve this by selling the combined data they gather from Facebook, Instagram, Messenger, and WhatsApp. Much of the data they sell is anonymous but it can be tracked back to your IP address, meaning that the third party company will follow you around the internet and can send you targeted ads from what you have been searching not only on Facebook but on google (this is why google AdSense will show you ads that include links to what you were just looking at on other sites)

Twitter's business model is similar to the business model of other social networks. It requires users to create a profile and then those users can post short updates about themselves (tweets). To create an account, a user must enter basic information about themselves, much like most other social media sites. Twitter has tried to strengthen its business model through acquisitions and partnerships instead of internal user or revenue growth. However, revenue growth is a huge part of a social medias profit and recently twitter has begun to focus on its video content and content creators, as videos have much larger engagement than text or banner advertisements. In order to encourage video makers, Twitter share revenue with them, where the creators get 70% of the cut and the rest is kept by Twitter.

A South Korean app, similar to Whatsapp, called Line, makes its income from in-app games, stickers and advertising. In Asia, the trend for stickers to send to one another is large, and a whole 40% of Line's profit comes from in-app purchases of these stickers. They also can make revenue from in-app payments between users and a subscription news service. Line's goal is to make them an all-in-one go to app, and are even considering creating their own cryptocurrency.