Economics of Social Media


Social media platforms in conjunction with economics is about the relationship between social media platforms and their users content with the companies that maximize the access of user’s personal information in order to shape, modify, and adapt their brand strategy to turn a profit. Recently, Facebook signed a controversial deal with WhatsApp, a company that has a large, young, and loyal user membership base, and in which, comparatively speaking; stands alone as unique and novel than any other social media platform because of its text messaging, picture and video sending services that are offered for free. Is this a smart investment on the part of Facebook? Does it hold any economic value? It seems to me that it does. Since companies are about branding their ideas and selling their concepts to a target audience, and ad targeting is the mechanism by which they accomplish this task, then it would behoove them to allocate a link that would supply them with concrete data that can discern the “wants” and “needs” of its potential target audience and thus drive their brand forward in the most effective and cost-effective manner. WhatsApp, a mecca for data information through text messaging, is exactly this. It is a marketing/advertising firm’s dream for its gateway to the “knowable” of existing trends and the imaginings of a material culture. WhatsApp processes 50 billion messages a day, and with that comes a plethora of information that can be useful to companies in order to strategize their ad content and effectively sell their ideas to its potential target audience. Although WhatsApp deletes messages once they have been delivered because of it privacy issues, Facebook, which already operates anonymously in accumulating data information that offers insights and trends to brands could potentially circumvent this issue by scanning the information before it is deleted and then attaching it a user’s persona page for ads targeting. To quote Mark Schaefer, “Let’s say a new movie preview comes out and the studio pays Facebook for an analysis of the buzz coming through WhatsApp text messages. Facebook scans the messages for volume and sentiment before deleting them and delivers a real-time report to the studio before the moviegoers have even reached their cars to go home.” (


It’s a relationship built on mutual economic interests; whereby one hand feeds the other. It’s a win-win situation. In utilizing WhatsApp data information, Facebook not only potentially increases revenue for advertising companies but it also becomes the model for successful advertising. Thus they are sought after for ad placements by major companies, and increasing their revenue pool. Bret Holmes, the director of Money Morning E-Commerce, stated in an article (How Do Social Media Companies Make Money?) written by Tara Clarke on, that,”… the key to unlocking value for social media companies is successful advertising models. Social media companies are legitimate advertising websites, no different than, say, Google or Yahoo. The same way Google made its money is the same way Twitter and Facebook will make their money”. (

With Facebook’s acquisition of WhatsApp it will become this successful model for advertisement, because of what WhatsApp could do for them through its vast user network and the incredible personal data of information that can potentially be related to companies that are willing to pay for that information. But it’s a two way street, as the rise of revenues in the billions show, social media platforms like Facebook and Twitter rely on revenues from ad placements linked to their newsfeeds or on individual posts for the fruition of their company’s growth and sustainability in the global market. Which is why it is no big surprise these social media empires are quick to jump on “golden” opportunities (i.e. WhatsApp) to build on the strategic points on which the economics of social media is built on, as asserted by Mark Schaefer: “1) Obtaining more users, and then increasing the amount of personal information collected about those users that can be turned into targeted ads, and 2) Getting users to spend increasing amounts of time on these platforms so they can see more ads.” (

As a side note, companies who are engaged with social media have proven that there is a direct correlation between profit and social media. In a 2009 report of the 2008 Business Week/Interbrand Top 100 brands that were studied, indicated that social media had an impact on their profit making (bottom line). Engagement is a key to success! Brands that sought out the avenue for ad targeting on social media platforms were more than likely to squash their competition who did not utilize social media as a tool to meet their bottom line. The report also showed that during recession, ad targeting on social media still brought in significant revenue, and brands saw increase of revenue by 18% over a year’s growth while those least engaged saw revenues losses of 6%. (

To me the most successful and inspiring of stories are the companies who build on a concept of emotional capital as a means to gain success with social media. There is an honesty and integrity for building on a communication base between community and brand. The economic value for such a relationship can be staggering, as exemplified by Stein Ove Fenne, President of U.S and Canada Tupperware Brands Corporation; who used Facebook in a personal and intimate way to showcase his personality and brand in a relatable and authentic way. He was building on the notion of emotional capital—an investment of sorts. “Emotional capital is the aggregate feeling of goodwill that people have towards their community,” said Shipilov. “Authenticity is the feeling of trust that people have towards the leader of the community that is being organized through social media technology.” (

How did he do this? Well, he went about using “soccer moms’ as his consultants for his Tupperware brand, and then conceptualized and developed a radio show program titled “The Tupperware Radio Show” (webcast programs) that showcased these soccer moms who participated and post comments on Facebook, while hosted the program. By doing this, he essentially formed a trusting and open relationship with his target audience and consequently during the weekend of his broadcast show his brand began generating great revenues.




What is a Social Graph?



The social graph is a concept. It is not a traditional graph so to speak, but a data structure. According to Mark Zuckerberg the CEO of Facebook, “It draws an edge between you and the people, places, and things you interact with online.” (

For example, if two or more individuals enjoy skydiving, then this common interest forms a network among those who share the passion for the sport, forming an “edge” or as I like to refer to it, “the spark” between you and other people who share this special interest. On Facebook, to “like” something is the connection point that forms the edge, which ultimately bridges you to people, places, and other things of shared interests.

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In 2011, Facebook developers expanded on their social graph by implementing The Open Social Graph into their social media networking site. The concept is rather simple, the Open Social Graph as a program through the mechanism of Facebook’s API, connects other outside websites and blogs with that of Facebook, and “It does this by seeing you as a user, identifying an action (whatever you are doing), and then publishing it as an object.” (


Basically, everything you do online is now identified on Facebook and in turn it is opening the possibility for more “network” connections and associations by the integration of all social graphs on one platform. This way when you like a Facebook page or a website that has a Facebook “like” icon, you have now opened yourself up to be associated with other users who have liked those particular websites. New associations are created and your social network has expanded!



Although to me, however way you dice it, you are to some degree sacrificing your own person and forfeiting more of your privacy as a citizen. With the integration of all your online activity into an Open Social Graph, you are inadvertently creating a unique but rather explicit profile of your identity as a person. Essentially you become an “open book” on this more expansive social graph that labels your identity and illustrates your personality with more precision then the conventional relational graph that exists. Should we not reserve ourselves? Are we not positioning a target on our backs for more prodding and solicitation by marketers, surveyors, and government officials that we don’t know about? How much information are you willing to put out there? My worry for my society is, that we have become too complacent with giving away much of ourselves to others, that eventually there will be nothing left to call our own because some entity or another now “OWNS THE RIGHTS TO US”…so to speak.

Below is a link to an article titled: 7 Big Privacy Concerns for New Facebook and the Open Graph, which I found very telling and insightful.

Yet to be frank, in some ways I am conflicted, because I also understand the modern world I live in and the status quo of a society that for the moment, has me bound by it. To explain my point, if I want to advance myself and have the opportunities to further my education, career, and world experience, then in many ways I have to compromise with a majority of the world that is “interconnected” through a rapidly growing technological web and make peace with it. It is likely, in the future, I could have a request by a potential employer for a link to my Facebook page which exposes my Social Graph that is linked to many more content and associations through the Open Social Graph program and that makes me a transparent candidate. So is this so bad? Probably to some extent, but not all the way through I guess. So yes I am conflicted, because I also see the benefits of the Open Social Graph as pointed by Jeff Korhan, on, “Social networks are all about context. Whom you associate with tells a great deal about you. Context not only tells us who you are, but by associations and comparisons, who you are not. You may be very similar to colleagues you associate with, but there is enough data to discern a difference. That association may be what helps you to be discovered, but it is the distinction that will get you hired.” You have the ability to distinguish yourself from competition and attract the attention of future employer. (

I also see the benefits it affords businesses , like marketing, when it comes to relating a particular product or brand with a target consumer. The Open Social Graph exposes a “Speaking Consciousness” which can illustrate to a marketer the emerging trends and the wants and dislikes of the consumer they are surveying on social media platforms. With the aid of the Open Social Graph, businesses can therefore eliminate the clutter of guessing or surmising the interests of a group or individual solely on one social graph. By virtue of this, a brand developer across the board, doesn’t need to spend as much money on advertising, because they now achieved a three dimensional aspect in their research through the use of the Open Social Graph, of their potential target consumer. For businesses, the Open Social Graph can be a cost effective and an economically sound base system, which aid their efforts.

As it is common in the culture of technology, new forms of facilitating information through transcription and transference is always on the precipice of innovation and change. It was no surprise therefore, for the developers of Facebook and their engineers to have adapted and “…shifted away from a relational database model to one more supportive of a graph that needs to stay consistent and support tons of reads.” ( To reference Emil Eifrem, the founder of Neo4j and CEO of Neo Technology, models for relational databases more or less behaved like columns and rows that represented different variables, whereas now, models for graph databases can be seen as “nodes” that share a relationship and key value properties linked to those nodes, which in turn builds a network.

And because Facebook’s previous infrastructure for storing and accessing users’ data was then supported by Memcached for in-memory caching and MySQL for continual storage were no longer an efficient method of functionality, they switched gears from a relational database that was MySQL to a graph database that is now TAO (The Associations and Objects). This new transitioning meant the ability to have more storage space and to quote dan1111,“…Storing all of the relationships at the individual-record level only makes sense if there is going to be a lot of variation in the relationships; otherwise you are just duplicating the same things over and over. This means that graph databases are well-suited to irregular, complex structures.” ( The TAO system is a multi-petabyte data store for its social graph and it runs on thousands of machines. It can deal with over a billion reads per second across a data set of many petabytes and according to Facebook, Tao was designed to better link together data kept in its main data store (MySQL) and caching layer (memcache), while being able to deal with unpredictable queries on objects. So, it basically deals with the workload Facebook experiences. Another thing of note: Facebook still operates with the 1800 servers dedicated to MySQL and 805 servers dedicated to memcache, as the TAO system works in tangent with it.

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Who Uses Social Media?


Who uses social media?
Since its conception, social media has imploded into a massive global phenomena utilized by billions. The pandemic effect of this technological social tool is far-reaching in scope. It is by no means limited to a certain class of people based on gender, ethnicity, or social class. No, in fact, almost every geographical region and its population thereof are associated, linked to, or know of social media. In my opinion, I liken social media to that of a “brand representative” or an “agency” so to speak, with its members as its clients. Social media serves a purpose and can hold many functions to its members, and members who seek that service (“platform”) to achieve their agenda. In naming a few examples of institutions and the type of individual or group who utilize the many forms of social media, I like to point out that social media is not exclusive to just “sharing” photos and networking. It is not limited or boxed in any capacity, it is pervasive in nature.
An example of those who use social media as a marketing tool:
Artists are beginning to capitalize on the immediacy and efficiency of social media as a forum to advocate and promote their craft, reaching millions of their followers in an instant. As stated by Jeff Bullas in an article he wrote on his website, “One of the world’s biggest music stars ignored the traditional mass media product launching process. She bypassed the “normal” mass media release of a radio campaign, multiple TV appearances and retail and consumer brand promotions. Instead she announced it on Instagram to her 8 million followers with the word “Surprise” and proceeded to launch the 14 songs and accompanying 17 videos on iTunes. It was a success and it exceeded the album downloads of the previous album which had used the traditional marketing model.”(
In my opinion, this is a revelatory testimony. It attests to the American (or perhaps more precisely, Euro-American) culture of looking toward alternative means to save time…to be more efficient and productive, by circumventing the loopholes that “eat up” our time. Like the saying goes, “it’s not working harder, but smarter.” Or in the case of social media, “let social media represent you and do the work for you”. The artist did not have to go into the world to promote her album…the world via social media was brought to her.
An example of people of from all walks of the social strata represented by social media:
Prisoners have access to mobile devices in the prisons and jail houses of both the United States and United Kingdom which allows them to link onto social media forums like Facebook. In actuality, and to the determent of others, they can still (to some extent) from the confines of their cell freely express themselves and have “contact” with the outside world. According to an article James Rush on Mail Online, he stated “Javed Khan, chief executive of charity Victim Support, said: ‘If offenders are able to access Facebook from prison it makes a mockery of the idea that they are being punished and can be hugely distressing for the victims of their crimes. ‘We know some criminals have used social media to taunt their victims and attempt to intimidate witnesses, and it is essential that this kind of activity is prevented.’”(
On this site, you can actually be a pen pal with prison inmates. In fact, this is what their website has to say about their services:
“Prison Inmates Online is a directory that connects people through social networks along with inmates in US prisons. A prisoner & family support & information network. It’s a great place to find prison pen pals or write a prisoner. Sure you can write a prisoner here, lots of them in fact. But Prison Inmates Online is so much more. It’s a whole social community for family, friends, and pen pals of inmates to come and share their knowledge and experiences. Is a great place for people just getting started to educate themselves as well. Here are some fun things you can do here, create events, post in the inmate forums or prison forums about general prison talk, view inmate ads or inmate profiles, be an inmate advocate, write inmate letters, find pen pals, read other prison voices, and be a part of the PIO and PVO community.” (
In my opinion social media can raise a lot of questions as it sometimes has both social and political implications. In the case of prisoners accessing social media, are they really locked up from “freedom” away from society or are they just as connected as they were before? Or more? Do they now have a larger pool to prey from? Is this really a tool for the purpose of rehabilitation? How are the victims and survivors coping with this, do you think? Is it in their alienable rights for inmates to have certain privileges or were they forfeited once they committed a crime? It seems to me that the lines are blurred here in relation to social media and the prisoners who utilize it.
An example through statistics of social media used by all ages and its lack of ageism.
Every age is represented on social media platforms. What once use to be a space for the young has quickly diminished and evolved to be more inclusive of all bodies of people irrespective of their age. As a matter of fact the margin of younger vs. older users is a narrow one. Statistics now show that 18-29 year olds have an 89% usage rate of social media, while those of 30-49 years of age are at 72%, and the 50-60 year olds 60%, while 43% of 65 and plus individuals are present on social media. (
In my opinion, the margin will eventually just close, I think. The “tech babies”, those who were born into this culture of social media and other technological advances in our modern day society, will eventually become the forbearer of social media. I believe everyone because of their proximity to those engaged in social media and the exposure to the exploitation of it in all forms of mass media and advertising will eventually become well versed and exposed in the language of social media, until something new encroaches on it.
An example how social media is used as a means to promulgate a political or religious message:
Terrorists have acculturated to the technological advances of the modern world. Arming themselves with a new type of weapon for social control and influence, they have framed their social agenda to facilitate the use of social media as a means to an end in exacting their plans. According to Laura Ryan, she stated in the National Journal, “Terrorist groups around the world have quickly learned how to manipulate the Web and social media, an invention of the West, against the West, and it is reshaping the war on terror.” She also quotes Weimann, a fellow at the Woodrow Wilson Center and a professor at Haifa University in Israel, for what he stated in his published report called “New Terrorism and New Media, “… terrorist groups are using social-media sites—including Twitter, Facebook, Instagram, YouTube, and Flickr—to spread their propaganda and raise funds, as well as to recruit and train new members.
How many use social media?
To address this question I simply share the statistics on this from the graph and data I have gleaned over. It has become apparent to me though, that the real underlining question is, “How many don’t use social media?” Seems almost everyone or every facet of society somehow fashion themselves or capitalize on the use of social media.
Social Network Statistics Data
On, it states that “Worldwide Social Network Users: 2013 Forecast and Comparative Estimates,” nearly one in four people worldwide will use social networks in 2013. The number of social network users around the world will rise from 1.47 billion in 2012 to 1.73 billion this year, an 18% increase. By 2017, the global social network audience will total 2.55 billion.” (


WHAT IS SOCIAL MEDIA? My Opinion and What I Have Discovered.


In my opinion social media is a dynamic and evolutionary digital information and communication technology that serves to engage a massive community of participants. It is a cultural invention that has been utilized and infused into many areas of political, cultural, and religious life…let alone social relations. It’s a community and a “universal think tank”- with the gathering of a universal or collective intelligence. It’s a meeting place like Facebook or Twitter where ideas, thoughts, and concepts can be shared and exchanged among a vast network of individuals. It differs from traditional media like television, radio, or newspapers for example; in that, it is not limited to a “closed system”. Andrew Chow made a few interesting distinctions in his blog between social media and traditional media and to highlight one example; is the power of influence it wields on its viewers or participants. He pointed out that the powers of traditional media (i.e. newspaper publications) which spin and report its stories does not facilitate for a space for dialogue. Whereas YouTube as a social media, which allows for an upload of a broadcast or newsreel as an example, serves the purpose of exchanging and sharing of information that will facilitate and encourage an “open system” among its massive audience. There is a dialogue (an exchange) that can be had among its viewers. To me social media is a space (a community hub) that has the potential for the limitless collaboration and exchange of ideas, expression, and concepts among a vast network of people. It’s a two way street, an “open system”, and it’s engaging, which is why I would not constitute emails as a social media. According to Anthony J. Bradley in his blog post, “I believe that difference primarily centers around [sic] e-mail as a distribution mechanism v. social media as a collective mechanism.” I agree with this statement, because email in one way is limited to contacts you may know with information only being related to a small community rather than the transfer and sharing of information on a massive scale. In other words, it doesn’t have an extensive reach. It is not a forum where you are linked to a vast network of interconnected people that are representative of a wide spectrum of geographical, social, and political standing and the exchanges and sharing of ideas thereof.
Another example I would not consider as social media is Wikipedia. According to Wikipedia, it is a community for gathering information only and it does not promote an exchange of dialogue among is viewers despite the exchanges and sharing of ideas and information on its site. This is because it does not operate as a forum or open network where conversations with the global inquisitors of the site can be had amongst each other.
Here are a couple of links where I came to a more informed opinion to the questions for this week’s topic.

Introducing: Light Seeker


Hello and salutations. I go by Light Seeker. I am a 30 something returning transfer student from the state of California, in pursuit of my BA in Sociology here at NYU SPS. As a fresh arrival to New York, I look forward to venturing the streets and boroughs of this great state and the heart of its metropolis in search for a deeper understanding and insight into the cross-cultural mesh of its populace. Hopefully, the merit of doing this will allow me to gain a new found knowledge and cultural acuity that will inform and cultivate my world view. In doing so, lies the potential I seek, to open my eyes to things unseen by the blinders of my own “learned” experiences.
I have varied intellectual and topical interests such as: religion and current affairs, exploration and nature, and the philosophies of man and his identity to the self, universe, and God. I must admit, I am both relieved and inspired to have finally arrived at the point of creating a personal blog. I’ve been mulling over the idea of creating one, long before enrolling into this Social Media course. I guess I finally got the push I needed! As part of the curriculum, I really have no other choice in the matter but to embrace and exercise this new type of medium…and I tell you, I’m glad for it!
I believe this course will endow me with a respective introduction to the skills and tools necessary for me to navigate and utilize the social media forums as a way to apply, express, and discover my voice through the use of the World Wide Web. Although, I would be remiss not to say, that at first I had my reservations about treading into the Social Media realm and sharing my personal thoughts. Who knows what lies out there…it’s an unpredictable animal constantly; and to some degree you are exposed. But at this point in my life, I have a stronger need to explore, to say something, to share, and to learn from others… so I am ready to dive in! Besides, I think with the reality of a fast evolving Earth whose interconnectedness is mostly dependent on technology and globalization, it is better to be adaptive to this new world language, then to suffer our ability to evolve within the new global culture, because of our own ignorance. Change is constant and the use of technology in its many facets and forms is an all too real budding landscape of our current civilization. With that said, my only experience of social media up to this point, has been my seldom appearances and use of my Facebook account and the development of an educational project video that was posted on YouTube. So I look forward in this course, to channeling the use of some of these social media forums as a way to have an open dialogue with a global community that could potentially heighten and enrich my personal outlook and lifestyle, while aiding my efforts to better understand this global phenomenon, known as social media and how I can benefit from it.