1. Chapter 8
Social Computing
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2. Chapter Outline
8.1 Web Fundamentals of Social Computing in Business 8.3 Social Computing in Business: Shopping 8.4 Social Computing in Business: Marketing 8.5 Social Computing in Business: Customer Relationship Management 8.6 Social Computing in Business: Human Resource Management 8.7 Crowdsourcing

3. Learning Objectives
Describe six Web 2.0 tools and the two major types of Web 2.0 sites.
Describe the benefits and risks of social commerce to companies.
Identify the methods used for shopping socially.
Discuss innovative ways to use social networking sites for advertising and market research.
Describe how social computing improves customer service.
Discuss different ways in which human resource managers make use of social computing.
Discuss the advantages and disadvantages of crowdsourcing to organizations.

4. Introduction Opening Case: Tiger Tans and Gifts
Human behaviors and decisions are influenced by their social context.
Social computing combines social behavior and information systems to create value.
Users, rather than organizations, produce, control, use, and manage content via interactive communications and collaboration.

5. 8.1 Web 2.0 Web 1.0: First generation of the Web
Focuses on creation and commercialization of the Web
Web 2.0
A loose collection of information technologies, applications, and the Web sites that use them
A new digital ecosystem that promotes creativity, connectivity, collaboration, convergence, and community

6. Web 2.0 Applications
AJAX
A Web development technique that enables portions of Web pages to reload with fresh data instead of requiring the entire Web page to reload
Tagging
Using a tag (a keyword) to describes a piece of information in multiple, overlapping associations rather than in rigid categories
Geo-tagging: Tagging information on maps
Really Simple Syndication (RSS)
Subscribers receive customized information when they want it, without having to surf thousands of Web sites
Subscribers receive a notification of the changes and information about the new content

7. Web 2.0 Applications Blogs (or weblogs)
Personal Web sites, open to the public
The site creator (blogger) expresses his/her feelings or opinions via a series of chronological entries
Blogosphere: Millions of blogs on the Web
Service providers:
Microblogging
A form of blogging using short messages, image, or video
Example:
Wiki
A Web site made up entirely of content posted by users
Promotes collaboration
Example:
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8. Web 2.0 Applications Social networking Web sites
A Web site that supports activities for maintaining social networks
Allow users to create a profile page, post blogs, and link and media share
Enterprise social networks
Business-oriented social network
Corporate social networks
Mashup
A Web site that takes different content from other Web sites and mixes them together to create a new kind of content
Example:

9. 8.2 Fundamentals of Social Computing in Business
Social commerce
The delivery of electronic commerce activities and transactions through social computing
Supports social interactions and user contributions
See Table 8.2 for benefits of social commerce
What are the risks of social commerce?
Risks of social commerce
• Negative, unedited, and possibly invalid and unethical reviews
• Potential bias content (20–80 rule of thumb: 20% of individuals contribute 80% of the content
• Information security concerns
• Invasion of privacy
• Violation of intellectual property and copyright
• Employees’ reluctance to participate
• Data leakage of personal information or corporate strategic information
• Poor or biased quality of users’ generated content
• Cyberbullying/cyberstalking and employee harassment

10. Benefits of Social Commerce

11. 8.3 Social Computing in Business: Shopping
Social shopping
A type of e-commerce using social networking tools to enhance the shopping experience
Ratings, reviews, and recommendations
Guide consumers in purchase decisions
Examples:
Group shopping
Major discounts offered for a short time
Examples:

12. Social Shopping Shopping communities and clubs
Offer discounts for members for limited time without diminishing a brand’s image
Examples:
Social marketplaces and direct sales
Social marketplaces: Online intermediaries using social networks for buying and selling products and services
Examples:
Peer-to-peer shopping models
Support bazaar-style and bartering systems
Encourage collaborative consumption: Peer-to-peer sharing or renting

13. 8.4 Social Computing in Business: Marketing
A process of building profitable customer relationships by creating value for customers and capturing value in return
Two main processes:
Advertising
Market research

14. Social Advertising Social advertising
Leverages user dynamics to influence consumers
Peer pressure, friend recommendations, likes, etc.
Social apps
Branded online applications that support social interactions and user contributions
Nike+ app
Viral marketing (word of mouth)

15. Market Research Market research
The open nature of social networking allows merchants to understand, identify, and target potential customers at zero or low cost
Conversational marketing
Using blogs, wikis, online forums, and social networking sites to collect feedback from customers
Social intelligence
A process of monitoring, collecting, and analyzing socially generated data to support strategic decisions
How do companies use social media tools such as Facebook and Twitter for market research?
Using Facebook for Market Research
• Get feedback from Facebook fans and their friends on advertising campaigns, market research, etc.
• Test market your messages. Provide two or three options and ask fans which one they prefer and why.
• Use Facebook for survey invitations (i.e., to recruit participants).
Using Twitter for Market Research
• Follow tweets about the company
• Monitor industry-specific keywords.
• Follow the most frequently used words

16. 8.5 Social Computing in Business: Customer Relationship Management
Social computing helps improves customer service
Companies are aware of the effects of negative comments posted by social network members
Opportunity to involve customers proactively to reduce problems through improved customer service

17. 8.6 Social Computing in Business: Human Resource Management
Recruiting
Recruiters scan online social networks, blogs, etc. to find information about potential employees
Job seekers are more visible to recruiters if they are online and active
Training
Several companies use virtual worlds for training purposes
Cisco uses its virtual campus in Second Life for product training and executive briefings
IBM runs management and customer interaction training sessions in Second Life

18. 8.7 Crowdsourcing
Taking a job traditionally performed by an employee or a consultant and outsourcing it to an undefined group of people in the form of an open call
Assumption: A large number of enthusiasts can outperform a small group of experienced professionals
Let freelancers, volunteers, customers, and low-paid amateurs solve problems, innovate, and get work done
Examples:
What are the benefits and risks of crowdsourcing?
Benefits of crowdsourcing
• Problems can be explored at relatively low cost, and often very quickly
• Many times crowds solve problems for free
• The organization can tap a wider range of talent than might be present in its own organization
• By listening to the crowd, organizations gain firsthand insight on their customers’ desires
• Crowdsourcing taps into the global world of ideas, helping companies work through a rapid design process
Risks of crowdsourcing
• How accurate is the content created by nonexperts in the crowd? How is accuracy
maintained?
• How is crowd-created content being updated? How can companies be sure the
content is relevant?
• Should the crowd be limited to only experts? How would a company go about doing that?
• The crowd may submit too many ideas, with most being worthless. If this happens,
it can cost too much money to evaluate all of the ideas.
• Content contributors may violate copyrights, intentionally or unintentionally.
• The quality of decisions depends on the composition of the crowd. The best decisions may come if the crowd is made up of diverse opinions and ideas. But, in many cases, companies do not know the makeup of the crowd in advance.

19. What’s in IT for ME? Accounting
Audit teams use social networking technologies to support communications
Finance
Finance-oriented groups on social networking sites provide access to expertise and potential clients
Marketing
Marketing professionals use social computing tools to become closer to their customers
Production/Operations Management
Production personnel use social computing tools to “enlist” business partners and customers
Human Resources Management
HR professionals use social network for recruiting activities
MIS
MIS department develops and monitors employee usage of social computing applications while at work

20. Closing Case 1: Facebook Commerce
Questions
What are the advantages for a business conducting commerce on Facebook? The disadvantages?
What are the advantages for customers conducting commerce on Facebook? The disadvantages?

21. Closing Case 2: Social Computing at Starbucks
Questions
Compare and contrast Starbucks’ marketing strategies across the various social networking sites.
Describe possible disadvantages of Starbucks’ use of social computing in its marketing efforts. Provide specific examples to support your answer.