This research tries to develop a framework to evaluate the value of SNS . The three major contributions can be summarized as follows:
1. Provision of an essential model to evaluate the value of Social Network Sites. While other models introduce general website indices, this newly established model is
accountable, concise, and places greater emphasis on the user-generated value, which is the most important characteristic of SNSs.
2. Draws a linkage between the evaluation of Social Network Sites and the Customer Lifetime Value model, which contains the key marketing concept of a customer’s value to a firm (Gupta, et al., 2004). The CLV model is adapted to calculate the value of SNSs, because we find the similarity that SNSs’ value is also determined by their members’
interactions (Shuen, 2008). This link opens a door to introduce the marketing concept to the management and evaluation of SNSs.
3. An example of implementation of the model is provided. We simulated calculation of the value of a SNSs website, Unis, and compared the results with actual data.
However, because of three identifiable limitations of the research, much work remains to be done. These limitations and the findings of this study may suggest the areas for future research.
First, as the object of the simulation, Unis is rather small and relatively new in comparison with other social network websites. The growth pattern and interactions of members has not yet stabilized, making it difficult to predict growth and value. Moreover, we use a Simple Linear Regression Model to generate simulated functions, rather than group members in accordance with their characteristics to analyze behavioral differences. This may make the simulation inaccurate. Therefore it is necessary to conduct a more persuasive validation of the SNSs Value model.
Second, the model is based on the fundamental functions of CLV. However, there are still many advanced calculation methods of CLV model (Donkers, et al., 2007; Gupta & Zeithaml, 2006; Jain & Singh, 2002). Adapting these to SNSs Value will help ensure greater
accountability.
Third, lots of managerial and marketing issues are discussed with respect to the CLV model. For example, how to balance acquisition and retention resources (Reinartz, et al.,
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2005)? How to segment the market and allocate marketing resources (Gupta, et al., 2006) ? How to use the CLV model to support decision making (Rosset, Neumann, Eick, & Vatnik, 2003) ? A website owner also has to consider these issues. However, a comprehensive study of these topics lies outside the scope of this research. We hope that extending this research to these topics will lead to general improvement in the management of SNSs.
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