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ComiXology Thousands of Digital Comics. Consequently, the typical tools for Web 1. This is related to the search for economies of scale, that is, the increase in the volume of transactions while the marginal cost of a new transaction decreases [9]. In addition, the software used to develop Web 1. The scope of communication ranges from local to wide area networks. Finally, due to the emphasis on information display and retrieval and the use of software as a product, Web 1. Characteristics of web 1. In contrast to Web 1.

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This new paradigm was initiated by Netscape, which developed one of the first web browsers and marketed it as a free service, and is now been pursued with more impetus by Google through its suite of Internet applications Google Apps Site Online social networks, i. Such networks are related to the small-world phenomenon, also known as the "six degrees of separation" see [51] , in which there is a small chain of acquaintances connecting every two persons in the world. These sites are developed using web programming languages that generate HTML on demand and interact with databases and other Web 2.

Such sites focus on collaboration and knowledge creation on the Internet, rather than on retrieving and displaying information. The emphasis on collaboration and creation of collective knowledge favors the provision of software as a service on this model of the WWW [11], supporting cloud computing -- computing model in which software and its associated data are centrally stored on the "cloud" [2]. In addition, Web 2. On the other hand, network effects are sought in the Web 2.

Network effects are positive externalities, that is, situations in which the welfare of an individual increases "by the actions of other individuals, without a mutually agreed-upon compensation" [16] p.

Network effects clearly exist in Web 2. Network effects become apparent after a certain level of subscription for the product or service is obtained, referred to as critical mass [45]. This requires attracting users to adopt the application before this level is reached. For pioneering or innovative applications, achieving critical mass might be simple if users find value in the system beyond network effects. However, in the case of applications that imitate others, obtaining the critical mass might be difficult.

Therefore, network effects in a Web 2. Another important aspect of Web 2. According to O'Reilly [39], the exploitation of collective intelligence is the primary reason why successful Web 1. Collective intelligence is related to Surowiecki's ideas presented in his book "The Wisdom of Crowds" [47]. Such type of intelligence pools the knowledge and experience of persons in relation to different social contexts. According to Golub and Jackson, individual beliefs converge to truth in a social network "if and only if the influence of the most influential agent in the society is vanishing as the society grows" [23] p.

This concept is based on social constructionism, theory which explains how knowledge is constructed through social processes [5]. Wiki applications fall into this category [8], and Wikipedia, in particular, provides a good example [21], [31]. However, collective intelligence in Web 2. According to these authors, "although [Web 2. The above comment derives from the lack of editorial control in most of the information available on the Internet. Although it is very difficult to establish such control, the risk of erroneous information appears to be manageable, particularly in Web 2.

The same case of Wikipedia illustrates this situation. A study published in Nature found that Wikipedia is as good as the Encyclopedia Britannica in terms of the quality of its information [21]. This conclusion is reinforced by the fact that the Encyclopedia Britannica has taken the decision to invite the public to write articles in its online edition, in response to the phenomenal success of Wikipedia [38]. This situation forces the development of light interfaces for such devices. Finally, social aspects are more important than the technological ones for developing Web 2.

For this reason, Web 2. This experiment focuses on knowledge and wisdom from a large number of users, but also leads to problems related to quality and integrity of content, and also security and privacy problems [54]. A social network is a social structure composed of individuals or organizations, called nodes, which are interrelated or connected. These connections can be represented by arcs which represent different types of relationships between the nodes, such as friendship, functional or dependency, or relationships in terms of beliefs, knowledge or social status [13].

On a personal level, social networks reflect the ways in which people relate through various social groups [54]. Although these networks are often considered as social media [33], following Constantinides and Fountain [11], we consider in this paper such networks more from the point of view of their application, rather from their social aspects.

It is important to distinguish in social networks two distinct but related issues: Social network analysis can be used to determine the relationships of power and dependency between individuals and organizations in social networks [13], [44]. As noted above, online social networks are websites that use Web 2. They are usually referred to as social networks; however, in this work we use the term online social networks to distinguish them from the actual social networks Boyd and Ellison [7] refer to them as social network sites. Current online social networks were preceded by systems like AOL and Geocities, which relied on chat rooms to allow large groups of users sharing similar interests to meet and have conversations in real time [27].

Also e-mail systems could be considered predecessors, based on the definition of Wellman [58]. According to Boyd and Ellison [7], an online social network can be defined as a web-based service that allows users: According to these authors, the main characteristic of an online social network is not its ability to meet new people, but rather the possibility to articulate and make clear the social networks of its users. Therefore, online social networks are used primarily to communicate and relate with other members that are part of an existing social network.

The above definition thus emphasizes the development of closed or intimate networks other definitions might not require that such networks be closed or intimate. Currently there is much attention regarding online social networks, since they have made more visible and quantifiable the real social networks, and also have become important tools of mass communication, particularly to disseminate news, create views, and influence others [7], [11].

There is a two-way relation between social networks and online social networks. On the one hand, social networks can be supported by online social networks, particularly by facilitating communication and contact information. On the other hand, online social networks make more evident actual social networks and enable their analysis. Figure 1 shows the professional network of one of the authors, considering his contacts in the online social network LinkedIn. A similar tool is offered for Facebook by TouchGrah Site Representation of a social network using LinkedIn using Site As shown in the previous figure, the social network can be divided into groups, identified by different colors according to different types of relationships.

The denser a group, the greater interrelation among the contacts, which is the case in the rightmost group presented in the figure see [13] for more information. Therefore, from a commercial point is important to analyze the effect of Web 2. A common perspective on the use of online social networks in business, as evidenced in the term Enterprise 2. According to Ellis et al.

The relationship between online social networks and the 3C model can be appreciated in the previous sections, with the exception that coordination is not yet as evident in such type of networks [12]. Despite its importance from a business perspective, groupware is not useful for explaining the use of online social networks for marketing, since it focuses on internal processes and employees. To explain the possible application of online social networks for marketing, we can rely on two other perspectives, which are discussed below.

The market perspective takes advantage of the number of users in major online social networks, by considering them as a potential market. As explained before, the amount of users in several such networks are tremendous. This situation presents valuable opportunities to do business based on the potential benefits that a company can get from such networks to promote their brands or products.

Based on an analysis of 47 Web 2.

What Is Web 2.0

Therefore, this perspective seems to be prevalent in using Web 2. However, it is important to realize that not all consumers have embraced online social networks alike. Young consumers are leading this way, followed by professionals and mainstream online consumers who have realized that Web 2. Furthermore, most existing online social networks began with a specific population in mind, and in spite of possible changes still attend such population [56]. Facebook and LinkedIn were originally intended to college students and professionals, respectively, and MySpace Site 19 has gravitated around young people which are music fans [7].

Therefore, in order to properly use online social networks according to the market perspective, it is necessary first to understand their demographics the site Quancast Site 23 can be used for this purpose, since it provides demographics data for most Internet sites. Several ways exist for companies to use the market perspective in online social networks. First, companies can create, without cost, profiles in such networks, similar to other users. A profile can be created for the company itself or for one of its brands or products. Relevant marketing information can be stored in this profile.

In the case of Facebook, companies should create a fan page creation of an individual profile by a company in Facebook is a violation of the terms of use of this online social network , which allow companies to be distinguished from individuals. Other social networks, such as Twitter, do not make this distinction, although this network offers a service to verify accounts, so users can be certain that they are receiving messages from a genuine source Site Second, in the case of MySpace and Twitter, companies can apply at the registration process for a vanity URL, in the form of http: LinkedIn creates a profile URL http: In the case of Facebook, a company can only apply to a vanity URL after obtaining 25 fans, with the aim of avoiding users to lock in into popular names and later selling them.

Similarly to company websites, vanity URLs in online social networks can be used for marketing purposes. Third, firms can send free messages to users connected to their profiles. However, users first have to connect to the company's profiles. Processes for achieving these connections might vary between networks, but usually require that the person creating the company's profile links first its personal profile to the company's and calls the attention to his connections about it, with the expectation that his friends or acquaintances also would link to the company's profile and spread the word about the company's profile among their connections.

Fourth, several of the major online social networks offer pay services to create ad campaigns targeted at groups of users satisfying certain conditions in their profiles, such as geographic location, gender, educational background, language or specific keywords.

In the case of Facebook, users of such services may pay in two ways: Facebook, in both cases, provides performance statistics for the ad campaign, as well as information about the characteristics of users who click on the ad Site Twitter also offers targeting ads Site Fifth, online social networks can produce powerful effects of viral marketing [46]. Viral marketing, or word-of-mouth marketing, is achieved when users advise or recommend their friends to use or buy certain brands or products. It is well known that these recommendations from friends or relatives have a strong influence in purchasing decisions, and they also can have a strong effect in acquiring new customers [3], [34], [52].

This situation has created "corporate interest This phenomenon can be regarded as an example of collective intelligence or wisdom of crowds, characteristic of Web 2. The like and comment mechanisms implemented in Facebook to recommend or comment on status updates or posts function as viral marketing instruments. Retweeting, in Twitter, can also be considered as another such instrument. Although viral marketing has been proved useful in web applications, the effectiveness of recommendations varies depending on product category and price.

Furthermore, although viral marketing at first glance might be considered as a result of the behavior of the network and not of its connectedness see section 3 , the structure and interest of the social network should also be considered [34]. Lastly, online social networks can be used as focus groups. People in online social networks might be discussing issues related to the products of a company or to the company itself.

Listening to such conversation, known as conversational marketing, can provide useful feedback on the products and the way the company is dealing with their customers [11].

What Is Web - O'Reilly Media

Since customers are not aware that they are being monitored, due to the perception of being anonymous on the Internet, they speak more openly about their sentiments regarding a company, a brand, or a product, than in face-to-face focus groups [56]. Tools, such as Google Alerts Site 14 and Social Mention Site 26 allow eavesdropping customer's conversations and obtain favorable or unfavorable opinions, which can be considered in future marketing decisions for Twitter's business applications see Site Important in this area is the analysis of sentiments for conversations [40], [42], in which Twitter excels.

The development of commercial services by online network operators based on the market perspective, particularly aimed at promoting sales of other companies, can be considered essential by the online social networks to generate revenue, and avoid falling into the same trap that victimized many e-commerce companies and ended with their bankruptcy, as a result of the dot-com bubble.

Different from the market perspective, the community perspective is less evident in e-marketing nowadays. This other perspective is related to the development of virtual communities using Internet. According to Turban et al. At least five types of virtual communities can be identified, as shown in Table 2. Although the purpose of these virtual communities is different, they all have in common the creation and support of social networks. Types of virtual communities based on [54].

Therefore, marketing in the community perspective should consider online social networks as communities of individuals sharing some type of relationship or common interests. When the concept of community is added to the traditional seller-customer relationship in the market perspective, customers interact with "self-selected communities" [15] p. Furthermore, under the right circumstances, these communities can act very intelligently and promote innovation [23], [32], [47].


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This has given rise to the use of crowdsourcing in marketing, that is, outsourcing marketing functions to a social network see [59]. As it can be inferred from the previous table, the virtual communities that nowadays are most strongly associated with businesses are the commercial communities, which are directly associated with e-commerce. While e-commerce sites have not necessarily been designed in accordance to the philosophy and principles of Web 2. In the first case, for example, Procter and Gamble has developed e-commerce sites with the purpose of creating communities of users on the Internet for consumer products manufactured by this company.

Such sites have the following objectives: These objectives are particularly important for a company such as Procter and Gamble, since it relies mainly on distributors to sell its products to the final consumers. In the second case, it is now very common for e-commerce sites to enable buyers to assess products once acquired, thus allowing prospective customers to make decisions about future purchases based on these recommendations.

Online reputation systems are important to reduce information asymmetry [16], particularly related to quality, which seriously affects the efficiency of markets [1]. Amazon presents a good example of this mechanism to evaluate products. In a similar vein, eBay allows customers to evaluate the performance of vendors, providing information to prospective buyers about the reliability of a potential seller. The wish list feature this mechanism allows relatives and friends to learn about products in which a person has interest, thus providing ideas for gifts used in e-commerce sites, can be considered as another example of creating communities around e-commerce sites.

These examples provide evidence of the evolution of e-commerce sites into virtual communities. On the other hand, the integration between online social networks and e-commerce is been enhanced by tools that enable adding e-commerce features, such as catalogs, shopping carts, and payment options, into social network pages, thus allowing the creation of electronic stores in these networks.

Payvment Site 21 and Ecwid Site 8 are two examples of such tools see Site 11 for a list of e-commerce apps available for Facebook. This type of integration is referred to as social commerce, term introduced in [57]. The above discussion shows that e-commerce sites are evolving into virtual communities, as well as the virtual communities supported by online social networks are being integrated with e-commerce features. This situation confirms the fact that the borderlines between online social networks and e-commerce sites are more blurry every day. As explained in the previous section, online social networks can be used for e-marketing, yet e-commerce is nowadays the premiere tool for such activity.

Three major differences can be found between online social networks and e-commerce sites; however as explained in this section, such differences are not insurmountable. In first place, there is a clear difference in the purpose of online social networks and e-commerce sites. On the one hand, the purpose of online social networks is supporting and creating social networks, which ultimately favor the development of the human web, as already explained. On the other hand, e-commerce pursues the use of electronic technologies to exchange goods and services [9].

So, while online social networks are aimed at communicating and maintaining social relationships, i. However, in spite of this clear difference, we have to recognize that economic activities are essential part of life, and thus complementary to social activities. In fact, "no aspect of business is more social than selling" [20].

Furthermore, economic decisions are often influenced by relatives or friends [52]. Therefore, we can argue that dividing social interactions from economic and business transactions is artificial. Second, the criteria for success of online social networks and e-commerce sites are different: Nevertheless, the effectiveness of the online social networks may contribute to the efficiency of e-commerce.

This is due to the fact that one of the most important factors for the operation of an e-commerce site, particularly for small and medium enterprises SME , is the awareness of the site. This is a precondition for customers to be able to buy products through an e-commerce site. Although Internet search engines can help to locate e-commerce sites, the rapid and constant development of new sites on the Internet makes it increasingly more difficult to properly position a website in these engines.

Appearing first in the results of a search engine is likely to increase four times the traffic of a site in comparison to another appearing on second position [56]. Consequently, sites that already have a large number of users and also high traffic, such as is the case with the major online social networks, provide significant benefits to host or promote e-commerce sites, particularly for SMEs.

Finally, online social networks are based on software offered by intermediaries while e-commerce sites are usually developed by the same firms. Nonetheless, this is a purely circumstantial situation. Since e-commerce involves well-established procedures, it is relatively easy to anticipate the expected functionality of an e-commerce site. This facilitates the use of existing software to generate e-commerce sites software as a product , for example osCommerce Site 20 or Magento Site 18 , or the use of existing software platforms for creating virtual stores using predefined e-commerce services software as a service , such as Amazon Webstore Site 4 or Yahoo Store Site The previous evolution of e-commerce is further enhanced by the use of mega e-commerce sites platform as a service , e.

Therefore, the above situation favors the use of online social networks as platforms for electronic commerce. This evolution is consistent with the Web 2. Social commerce, explained before, clearly exemplifies this trend.

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Based on the market perspective, introduced in the previous section, we can claim that online social networks and e-commerce sites are not substitutes, but rather complementary tools for e-marketing. Due to the large number of users and high traffic that many online social networks have, these networks provide ideal conditions for advertising brands and products. This situation promotes a virtual integration between online social networks and e-commerce sites, which is achieved through links to the e-commerce site of a company in ads or messages sent using online social networks, or through e-commerce tools, such as Payvment and Ecwid, which expand the capabilities of online social networks to e-commerce.

Furthermore, platforms for developing e-commerce sites also provide this type of integration, such as is the case with e-Bay Stores to Go Site 7 which allows the integration of e-commerce stores created using e-Bay's model with online social networks. On the other hand, we can argue based on the community perspective, also introduced in the previous section, that virtual integration between online social networks and e-commerce sites is likely to proceed in the near future to the next level: Although different types of virtual communities can be distinguished, it is artificial to separate social from economic or business interests, as previously indicated.