Social networking on e-business


Social networking has become the biggest frontier. This paper explores the issues surrounding social networking in the business world and specifically on e-commerce.

When people interact with others on the internet, exchanging information using social media sites it is said that they are socially networking. As we analyzed the impact that social networking sites have on e-business systems it became clear that this is a business venture that needs to be explored. Marketing of products, Selling of goods and services and customer Relationship management are just but some of the areas that most companies who have ventured into e-business thrive. But most of those businesses need to be aware of some of the risks involved in this internet like malware, Data security, and financial information security.


Social Networking has become very popular during the last few years.

Early social networking websites in the early 90's focused on bringing people together through chat rooms, and share personal information and ideas personal homepage publishing tools which are the precursors to blogging. There were different approaches and innovations which gave the users more control over their content and connectivity. Between 2002 and 2004, Friendster, MySpace and Bebobe came the most popular social networking websites while Facebook, emerged as a competitor, rapidly growing in size.[1] Social Networking became a business strategy component and diversified both in territories and languages across the world. There are currently approximately 200 existing and emerging social networking models.

There are basic principles that have been embraced with time in the concept of social networking, these include involving and engaging the user quickly, enable self expression where the user can customize their profile and community building in which the connection interactions create an environment that fosters development of communities. As these communities grow, contributors become emotionally vested in the network.

The amount of trade conducted electronically (e-business) has also grown extraordinarily with widespread Internet usage.

E-business is a term used to describe businesses that utilize business technologies to streamline business processes, improve productivity of a business and improve customer service.

The following elements are key to conducting e-business:

  • A product or service been offered
  • A place to sell the product - web site acts as the place
  • A way to get people to come to your website
  • A way to accept orders
  • A way to accept money
  • A fulfilment facility to ship products to customers
  • A way to accept returns
  • A way to handle warranty claims if necessary
  • A way to provide customer service e.g. email, online forms, online knowledge bases, FAQs etc

Social Networking impact on e-Commerce and e-Business.

Impact of Social Networking on e-business

Technology companies such as Intel and Cisco were among the first to seize the Internet to overhaul their operations. Intel deployed Web-based automation to liberate its 200 sales clerks from tedious order-entry positions. Instead, salesclerks concentrate on customer relationship management functions such as analyzing sales trends and pampering customers. The business analyst also have an opportunity to analyse the data and come up with information concerning their products and how they can improve on sales. This can be done using systems like Business intelligence. Some of the propable impacts on e-business are:.

Marketing and advertising (Goad,R and Mooney, T, 2008 i,iv,x)

Social networking can be a very effective forum in which to transmit useful information. When something 'clicks' with a large group of people, you can better stand the chance of people telling all their friends about the content and/or brand.

The number of bloggers and people who heavily use social media is increasing. This makes any money spent on marketing toward their demographic a smart thing to do.

Previously consumer campaigns relied on luck or clever marketing to 'go global', but social networks provide the perfect forum for campaigners to build a support base within a matter of days. Therefore social networks will become the dominant channel for viral marketing. There have already been some notable examples of successful consumer campaigns organized via social networks.

Corporations will change the way they relate with customers

Successful business is really all about building relationships. Blogs and social media networks are great ways to reach out to customers to offer an excellent source of service and assistance. Companies should be mindful of keeping the relationships professional, but being in a position to know what your customers think, and respond directly to them, is a real advantage. Most companies know the power of being able to handle and address reputation management issues, as well as the impact of positive feedback. Customer service and relationships have become more important for all companies.

Social Networking May Allow Increased Revenues

Enterprises will be more visible and accessible to the market. This will allow:

  • Expanded reach
  • Faster launch of products
  • Better customer experience

The more people you reach the higher the possiblity of increased revenue; Also the more the products are launched the higher the probabilty of selling more hence increased revenue. Good customer service will always bring back same customer and who will inturn market you to other people.

Consumer power will manifest itself through social networks

Consumers will vent their anger when they are wronged by corporations. The growth of user-generated content, blogs and video upload websites have all helped give people a voice online, but social networks add an extra dimension.

New Products Innovation

Social networks will provide a forum for collective thinking and sharing of ideas between customers, partners and employees. People will have global contacts and can keep tabs with what their global contacts mention on social networks. People will have a global view of subjects that interest them. Enterprises will take advantage of these relationships, global trends and anticipate customer needs to develop new innovative products.

Involvement and shared knowledge produces better quality work therefore new products will be of good quality.

Corporations Will Change Their Organization

Many businesses debate how they can flatten the pyramid, to gain the benefits of startups with their associated adaptability and fast growth models. Sales clerks who were doing data entry will find themselves doing data analysis. Marketing people will stop going from house to house but instead find themselves doing marketing on social networks. Most employees will find themselves doing different roles and responsibilties.

IT/Telecom Applications will mutate

Corporate directories will become rich applications, company intranets will be personalizable and presence features and user rating will invade almost every application. Customer relationship management systems will be customized so that the public can do some processes online without physically going to the company offices. Examples will be like ordering of products online, changing of pin numbers for phones etc.

Networking Will Be Key to Employee Excellence

Networking of People and sharing of information, challenges, and success stories will improve the knowhow of employees. This will make them think more globally as their contacts become increasingly international. This has the advantage of making the employees become experts in their field and hence sort out issues quickly and efficiently. Their work will be of high quality and standard. In case of issues that cannot be sorted out, the employees will always refer to their international contacts that might be having vast experience and hence will reduce the costs of calling expatriates in case there is technical problem that cannot be sorted out.

Corporations Will Change Their Vision

As businesses become more transparent thanks to the increasing volume of information available online, employees will rely more on the enterprise culture, and search for it if it is not explicit enough. In parallel, stakeholders will seek proof of corporate social responsibility awareness, made inevitable by the growing transparency. Eventually, corporations will define their "unified collaboration and communication" strategy at the highest level - the vision. Such visions and values will help the company focus on ways and strategies that will shape their company's future. The success of an organization will depend mostly on how the employees understand the vision.

Social networks will become the dominant channel for viral marketing campaigns

Social networks will become the dominant channel for viral marketing campaigns in future. Successful future viral campaigns will incorporate both social networks and email, but with an emphasis on the former. Social network will use influence of friends to market viral products. If it's a good product then it the information will move like wild fire. Though same sites can be used to blast a product that is not of good standard.


Some of the challenges that will be encountered by businesses are:


Bandwidth, memory and archiving storage needs will increase to support rich media applications. Media applications are notorius for taking up alot of space.


As a wide range of applications develop, capabilities inside and outside the corporation, interoperability of applications across software platforms will be imperative.

Adopt New ROI concept

Corporations will need to review the corporate key performance indicators from the traditional ROI methods to incorporate the move to Social Networking. Intangible values will need to be considered when calculating ROI. Though financial success remains the paramount criteria for success, it will not be the sole criteria anymore.

Uptake of social networking in corporation

Conservative organisations will not see the uptake of social networking tools as they are viewed as time wasting. Most corporations have policies in place to block access of social networking web sties from within their corporate networks. There will be need to convince the management of most companies the importance of such sites.

Cultural Diversity

Since we have different people and cultures in the world it becomes difficult make everyone happy. Different people would want different views of the website. There are those who won't like the colour or certain images, while others might want it in their language.

Also the cultural assimilator should check to make sure the proper meaning is being disseminated for each communication effort. However, using local firms to translate the Web pages often prevents these types of communication problems from occurring.

Increase of cyber attacks targeting corporations

As more business rely on web sites to drive their products and services to the market, these sites will become targets for attacks by hackers, crackers and disgruntled competition. From a business perspective Denial of Service (DoS) attacks appear to be the most serious threat. DoS attacks consist of malicious acts that prevent access to resources that would otherwise be available. Even though data may not be lost, the financial losses that could be incurred from not being able to supply a service to customers could be of much higher value.

Risk of Loss of Employees, Losing Human and Intellectual Capital

The most disruptive impact for corporations will be an increasing ease of mobility for employees who maintain an active professional dialogue with their counterparts around the world. Employees will always look for greener pastures in other places which might interrupt the running of businesses. This will lead to companies hiking salaries for there key resources so that they don't leave for other more rewarding jobs.

Capturing the Value

Social Networking adoption will need a management system or even a "listening" system to ensure the value is captured. Management should ensure the quality of systems is high and reaches its potential. There is a possibility of companies implementing systems that they will not use. This bog brother syndrome might increase costs while not bringing value back to the business.


Technology is changing at alarming rate and therefore the corporate world needs to keep up with speed. If left behind the company may lose business to other competitors who have embraced the latest technology. Speed of implementing new technology is expensive and hence need for analyzing benefits before giving a go ahead for new systems.

Discussion of possible applications focusing on opportunities, benefits and risks

Opportunities and benefits

With the number of internet users growing at a breath taking rate it is important to grab the opportunities that come with it. Companies that have a vision have started incorporating e-business systems into their setup. Some of the opportunities that e-business can maximise on are: McGregor (1999) [8]


E-commerce includes online ordering and invoicing, online payment and transactions, automated customer accounts, electronic presentation of products. When a customer access a product he/she has accurate and up to date information since the web application is accessing the database at that integrated with backend systems.

Online ordering can also be integrated with order entry system. Also you can establish partnerships with payment service providers so that users can pay online. Such setup will improve time taken to serve a customer and also reduce overheads.

Supply chain management

Supply chain management can be done via web if there is a two way communication way can be setup on the web servers and extranets of both parties. This in turn will improve customer satisfaction through improved stock control and customer profiling. It will also reduce costs through efficient stock management. Data integrity is maintained from streamlined and faster communication.

Customer relationship

Customer information is collected and saved in one location hence there data consistency whenever information is retrieved. Analytical tools can be used to get information on customers purchasing habits which in turn can be used in future to target them with related products. This can be a powerful tool to raise revenue.


In each business you implement there are always risks that area associated with it especially in this '' generation. Some of the risks are discussed below.

Invasion of privacy

Having sensitive customer data will need high level privacy. There is always a possibility of the privacy of a customer being infringed.

Lose of money to fraudsters

Fraudsters might take advantage of insecure payment service providers systems and run away with money. There is need for security tight systems and privacy of financial information of customers.

Wrong customer information

If customers are left to give there information without supporting documents, they might end up giving false information and hence having wrong information in the database.


Customers can claim that their order did not reach them while the truth is that it reached them. They can even go to the extent of demanding for a refund.

Malware infection

There is a possibility of being harassed by malicious software. This are common when you are connected to the internet.

Summary of the lessons learnt and recommendations

While the number of people accessing social networks is increasing at alarming rate the people who are accessing it for e-business purposes is not increasing at the same rate. This might be because of the risks mentioned above. Companies should make sure that customer information is secure and of good integrity.

Organisations need to change the way they do business. They should setup a team that can come up with a policy that will take advantage of the social networking sites and do business. There are opportunities that we talked about earlier on that organisations need to look at and implement. This will help them have a competitive advantage over their competitors. Companies need to focus on the line of business that they are involved in. They should not go astray by just trying to do what other companies are doing just because the other companies are successful. If they do so they might end up implementing "white elephant" systems.

Internet speeds should also be looked at by improving the infrastructure (Use of fibre optic). Also shortage of qualified technical personnel should be addressed. Technicians who can maintain e-commerce systems should be well trained.


Social networking has made huge impact on how people socialize, communicate and share information. Its growth has led to some organisations changing their strategy so that they can benefit from the social influence from users on such websites. But even with all these transformation, few organisations are ready to take advantage of this phenomenon.

There is need for e-business companies to implement Systems that can capture social interactions in a format that can be accepted by ecommerce websites. This is important since such information with help of an analytical system can be used by the sales and marketing teams to come up with reports that can be used to make marketing decisions. With the right vision that focuses on how to utilize the information collected from users a company can gain competitive advantage over its competitors.


  1. Steve Rosenbush , " News Corp.'s Place in MySpace," BusinessWeek, July 19, 2005. (MySpace Page Views figures) 2005.
  2. News Corporation buys MySpace: website.
  3. ITV buys Friends Reunited: website.
  4. Over 200 social networking sites: InfoJuice website. Retrieved on January 19, 2008
  5. David Skul, , "3 Principles of Social Network Design", 12/21/2007
  6. Goad,R and Mooney, T. (2008). The Impact of Social Networking in the UK. Ref i,iv,x.
  7. McGregor D. (1999) e business. The opportunities. (Accessed Jan 5th 2010)

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