Value of Online Social Networks from the Perspective of the User

By Silvius, Gilbert A. J.; Kavaliauskaite, Ruta | Journal of International Technology and Information Management, February 2014 | Go to article overview

Value of Online Social Networks from the Perspective of the User


Silvius, Gilbert A. J., Kavaliauskaite, Ruta, Journal of International Technology and Information Management


INTRODUCTION

Over the last 10 years, the use of online social networks (OSNs), such as MySpace, Twitter, LinkedIn and Facebook, has grown at a spectacular rate (Mislove, 2009). With now over 1.3 billion active users (Statisticbrain, 2014), Facebook should be considered as the most significant OSN, with Twitter and LinkedIn following on some distance (eBizMBA, 2014). Leading brands integrate social networks in their marketing mix and American users are reported to spend roughly a third of their time online on Facebook (Sachov, 2010). Users are so engaged in OSNs, that this tendency prompts the idea, that social networks are an inseparable part of the lifestyle and existence of these users.

The business model of OSNs relies heavily on revenues from online advertisements and sales of user data (Frommer, 2012; Kulkarni, 2013; Spotter, 2013), for example, Facebook promises to stay free for basic services (Cochran, 2009), LinkedIn is generating 20% of its revenues from users in the form of premium memberships (Spotter, 2013). It is suggested that in the future, users may be charged for more advanced services or an ad-free experience (Kaplan & Haenlein, 2010). These developments sparked the research project reported in this paper, in which we explore the extent to which users of Facebook, Twitter and LinkedIn would be willing to pay for their use of it.

The research questions in our study were formulated as How much money are users and nonusers of the OSNs Facebook, Twitter and LinkedIn willing to pay for the use of these OSNs? and Which factors influence this willingness to pay for use of the OSNs? As previous studies on the willingness to pay for OSNs are scarce, this study is of an explorative nature, deploying a review of relevant literature and data collection using a questionnaire to a sample of 202 respondents in the Netherlands.

The next paragraph reports the literature review on the factors that influence willingness to pay. Based upon the findings of this review, we constructed the conceptual model and derived the questionnaire for our study. We applied this questionnaire to a sample of 202 respondents in the Netherlands. The findings section of this paper reports the results and analysis of this study. The paper concludes with the formulation of potential hypothesis on the willingness to pay for the use of the OSNs, and the factors influencing this willingness.

LITERATURE REVIEW

As the study was performed in the Netherlands, we shall first discuss the use of OSNs in the Netherlands and the reason that OSN use in the Netherlands may be a relevant indicator for the development of OSN use in other countries and regions. Following this section, we will zoom in on the literature discussing willingness to pay for the use of OSNs and on the factors that may influence this willingness.

Social network use in the Netherlands

The Netherlands is a social networking country. In a recently published study by the British Office for National Statistics, the Netherlands tops the list, with 65% of the population active on one or more OSNs (Office for National Statistics, 2013). Also in the Netherlands, Facebook, Twitter and LinkedIn are the top three most used OSNs, with the local former market leader Hyves being diminished to a marginal position in the last three years (Oosterveer, 2013).

In a study of social networking usage in the Netherlands, Mike Read, senior vice-president of ComScore Europe stated, that "Another interesting facet to this market is that the Netherlands has the highest Internet penetration worldwide for two of the other key global social networking sites, Twitter and LinkedIn. The Netherlands is in many ways a nexus of global social networking behaviour" (European Travel Commission, 2011). It is for this reason that we believe that our study bears relevance also for OSN use in other countries and regions.

Willingness to pay

The impressive use and growth of OSNs can create an illusion, because economic doctrines states that things, which are complimentary usually are used unlimited, without thinking of their real value. …

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