Case Study #2: Facebooks Dilemma
1. What concepts in this chapter are illustrated in this case?
The concepts that the case study entitled, “Facebooks Dilemma” highlights out of chapter 10 of Management information Systems: by Kenneth Laudon & Jane Laudon are based around what is identified as Electronic commerce. Electronic commerce is the use of the internet and the web to perform business transactions more specifically, to perform commercial transactions between organizations and individuals alike. Facebook is what is known as virtual community, it falls under a more specific kind of virtual community known as a social networking site. Online communities are used by individuals for expanding business or social contacts, and social shopping sites; in which users swap shopping ideas. The case study goes into a detailed analysis of how facebook has become an opportunity for electronic commerce to take place, however the process of allowing this electronic commerce to take place has been hampered due to legal issues concerning the users privacy in these interactions that private companies use to create their advertising. Currently face book is not generating the expected amounts of revenue that it is capable of based upon the beliefs of some, one of those select corporations that does believe it will someday soon be a Mecca of advertising commerce is Microsoft, who bought 1.6% of the facebook company for $246 million (Laudon pg 409). Surely if a corporation like Microsoft is willing to spend an immense amount of money to become a select share holder like that must believe that there is some truth in the predicted success of face book advertising opportunities. 2. What is the role of e-commerce and web 2.0 technologies in facebooks widespread popularity? In terms of e-commerce facebook is such an important tool because it has so many members that share information through the site in turn making it easier or a primary social networking site for companies and corporations to identify and interact with potential customers on several different levels. Facebook is a tool from understanding that in terms of information density can and is exactly what companies would be interested in order to cultivate advertising to specific individuals. Facebook also has a global reach that spreads further and to more people than most other sites except for one, Myspace.com(Laudon pg.388). Because of its attractive simplicity and easy maneuverability to the user it is growing rapidly along with the e-commerce opportunities that it presents to businesses. Web 2.0 technologies is basically referring to applications that facilitate communication in terms of sharing information, however they are based upon user-centered design. Social networking sites such as Myspace.com and Facebook fall under that definition, and have become extremely popular to communities and individuals all across the world. In terms of business, businesses have exploited this free advertising by creating their own pages to allow the users of Facebook to explore information that they wish to share with a large amount of individuals. It is a platform for free advertising in that sense, however the case-study is more based around the creation of advertising that will produce a larger revenue stream. 3. Describe the weaknesses of Facebook’s privacy policies and features. What management, organization and technology factors have contributed to those weaknesses?
Businesses are interested in the information that is shared by the individuals through facebook in order to advertise effectively to an immense amount potential customers; however the users of facebook have a right to privacy that has in the past been violated by facebook in attempts to allow these businesses to advertise to their users. The example that the case study uses is the launch of a company’s advertising campaign called Beacon. The plan was for Beacon to...