Social networking sites use disruptive technology to run their businesses. Each social networking site is trying to develop the new “it” technology that will render its competition obsolete.

            The main business challenge facing social networking sites is that there is no clear way to assign a value to them. Competition is fierce in the social networking world because there are so many sites trying to compete. New technology is developed everyday; therefore, a social networking site can literally become outdated overnight.  

            Social networking sites consist of five main characteristics. Social networking site are user based, because individuals are able to contribute and organize information. Social networking sites are interactive, because they allow users to connect with each other. Social networking sites are community driven, because their members typically share something in common. Social networking sites revolve around the number of relationships formed between members. Social networking sites make it possible for users to share/communicate emotional content.

            Social networking sites are susceptible to security breaches; therefore, each user’s information may become visible to an outside party. Constant communication can have unintended consequences. Your house may be robbed while you are on vacation because the wrong person happened to see your tweet about being out of town for a week. Social networking sites are linked to viruses and spam mail. Social networking sites have become an outlet for bullies and stalkers. 

            Mobile applications are currently the biggest trend in the social networking world. Mobile applications give social networking site users the ability to access the site anywhere, anytime. Cell phone companies are aware of this trend, and have started to created cell phones that cater to social networking sites. Older individuals have begun to use social networking sites more frequently. Businesses are starting to use social networking sites to communicate with employees.  

            Social networking sites can generate revenue by partnering with other companies. For example, Facebook recently partnered with smartphone manufacturer HTC to release a line of Facebook branded cell phones. Social networking sites can offer users additional/improved services for fees. Social networking sites like Facebook charge its users $1.00 to send “virtual gifts” to other users.  The popularity of social networking sites has made it relatively easy for them to attract investors. If a social networking site is desperate, it can sell its user information to outside sources.