Page 307 - Electronic Commerce

Chapter 6

monetize their visitors by charging fees. For example, leading social networking sites
Facebook and Twitter sell advertising only and do not charge any user fees.
Other social networking sites that use a mixed-revenue model are the financial
information sites The Motley Fool and TheStreet.com. These sites offer investment advice,
stock quotes, and financial planning help. Some of the information is provided at no cost,
additional information is available to subscribers who pay no fee but who are required to
provide personal information, and even more information is available to subscribers who
agree to pay a fee.
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Fee-Based Social Networking
An early attempt to monetize social networking by charging visitors a fee for a specific
service was the Google Answers site. Google Answers gave people a place to ask questions
that were then answered by an expert (called a Google Answers Researcher). If the poster
of the question was satisfied with the answer, they would pay the expert a small fee
(usually $10–$50). Google administered a test to determine which members of the
community were qualified to become Google Answers Researchers. Google operated this
service from 2002 to 2006 (questions and answers posted during that time period are still
available on the Web site). Similar services operated by Yahoo! (Yahoo! Answers) and
Amazon.com (Askville) allow volunteers to answer questions, but as free services, they
provide no opportunity for researchers to earn fees. These services do generate
advertising revenue for the sites, however, and Askville includes many questions and
answers about Amazon.com products and services, so it serves as an additional customer
help resource for the company.
After Google closed its service, a number of the people who had been Google
Researchers joined together and started a similar service on the site Uclue. Researchers
earn 75 percent of the total fee paid to Uclue. Advocates of using paid researchers
argue that the quality of the answers is higher than on free sites and that the questions
tend to be more serious and better formulated. Both approaches are examples of
how Web sites can generate revenue by providing a place in which virtual communities
can interact.

Microlending Sites
One of the most interesting uses of social networking on the Web has been the emergence
of sites that function as clearinghouses for microlending activity. Microlending is the
practice of lending very small amounts of money to people who are starting or operating
small businesses, especially in developing countries. Microlending became famous in 2006
when Muhammad Yunus and the Grameen Bank won the Nobel Peace Prize for their work
in developing microlending initiatives in Bangladesh.
A key element of microlending is working within a social network of borrowers. The
borrowers provide support for each other and an element of pressure to ensure the loans
are repaid by each member of the group. Kiva and MicroPlace are examples of social
networking sites that bring together many small investors who lend money to groups and
individuals all over the world who need loans to start or continue their small business
ventures.

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