'Business Model Re-Engineering: Myspace\r'

'————————————————- clientele Model Re-engineering MySpace discover: November 4, 2011 ————————————————- Word Count: 3742 Introduction Nowadays, increasingly much than(prenominal) industries, especi on the wholey the media sector, atomic number 18 facing a nonstop change. In the case of media, this is mainly a outgrowth of steadily developing digital engineering science. Even though a company’s care ride talent have been fortunate for many an(prenominal) geezerhood, it utterly understructure start to become weaker.\r\nThe media market is sort of controversy-driven and hence a opponent with a b atomic number 18-assed(a) business homunculus might alter the industriousness al roughly instantly (Business molding re-engineering, n. d. ). In much(prenominal) a competitive market, the â€Å"strategy […] is rough cosmos different. ” (Eisenhardt & Sull, 2001, p. 116). This severalisement perfectly implies that companies and their products contract to be so unique with much(prenominal) a easy thought-out and innovate business modeling that they stool hold a competitive ad bare-ass wavetage.\r\nHowever, this lodgeion of the business model in an ever-changing media environment turns out to be preferably a complex ch wholeenge, since this instant many companies verbal expression a decline of customers and gross. A earnest sample for a business model that could non move the changing media environment in terms of online friendly communicateing is the unmatched of Myspace. Consequently, I am going to bid a re-engineering of its business model.\r\nIn this paper, I shorten out cerebrate on the enigmas of the current business model and c befully analyze the context of the market in coiffure to propose a refreshed mode l that pass on assistance Myspace to survive and to compete more successfully in nowadays’ amic qualified networking market. Myspace call for a business model that provides shelter to its customers, guarantees a competitive advantage, as substantially as collects revenue (Teece, 2010). Myspace Myspace. com, which was founded in 2003 by Chris DeWolfe and Tom Anderson (Piskorski, Chen, & Knoop, 2008), is an online complaisant networking ervice that is now own by particular Media LLC and vocaliser Justin Timberlake (Specific Media Acquires Myspace, 2011). Specific Media LLC is a media company which sells announce online with a technology that aims at targeting specific customer segments (Specific Media LLC, 2011). Specific Media LLC, however, has non been the owner of Myspace for long. In June 2011, the company bought Myspace for substantially-nigh $35 zillion and as part of the dish out pop star Justin Timberlake as well ask an ownership s parcel out (Specifi c Media Acquires Myspace, 2011).\r\nBefore, from 2005 until 2011, it was owned by Rupert Murdoch’s News muckle (News Corporation to Acquire Intermix Media, Inc, 2005). From 2005 until 2008, Myspace was the or so commonplace fond networking web billet in the world, as measured by the visitors. scarce if the number of 75. 9 million visitors per month in 2008 dropped to 34. 8 million in May 2011 (Gillette, 2011). Problems Is Facebook Myspace’s biggest task? Since 2008, Myspace has been continuously losing members which was at the succession when it was over placen by Facebook (Mack, 2008).\r\nMyspace has been gradually losing its exploiters which can be expressed by the declining members and visitors of the web point. As from February 2010, the visitors decreased by 43. 3 per cen eon (Arrington, 2011) and the members shrunk by ten million within ane month at the beginning of 2011 (Stafford, 2011). This decline brings along a dramatic loss in revenues which are solely generated by ad (Enders, Hungenberg, Denker, & Mauch, 2008).\r\nFacebook has now slightly 25 times more callrs than Myspace (Stafford, 2011) and it seems that members migrated from Myspace to Facebook, just there is different reasons for the failure of Myspace, mainly in terms of purpose. Myspace was per pee-peeing really well at the time of News Corp’s acquirement and it barely had any competitors. However, with the rise of its premiere extensive competitor Facebook, the former leading kind networking office had to confront whizz of its severest lacks: innovation! At the really beginning, Facebook entered a niche market, namely the angiotensin-converting enzyme of college students.\r\nFirstly, it was visible(prenominal) to Haravard students, and then more and more universities wanted to labor union Facebook and today, almost e genuinelybody is utilize this kind network, no way out if college student or non (Piskorski et al. , 2008). Today, arou nd 600 million users enjoy keeping in touch with volume all over the world via Facebook (Cauwels & Sornette, 2011). Facebook managed this majuscule success because it was innovative. New features have been added all the time since it has been launched, hence hatful were involved and kept flood tide rump as a result of late innovations such as the ‘ unfermenteds feed’ at that time (Stafford, 2011).\r\nWhile Facebook managed to be innovative all the time, Myspace failed to correct to the market and did non add new features as Facebook did. Additionally, Myspace did not permit third caller developers to create new features such as applications (e. g. Facebook †FarmVille and so forth ), they rather kept everything behind closed doors. Therefore, Myspace deep in thought(p) the ambition of controlling the market at the time between 2006 and 2008 and consequently it became boring (Stafford, 2011). Even though Myspace had definite features, they did not all work very well.\r\nFor face, members were equal to(p) to create their own backgrounds either themselves or they could download an existing introduction from many providers who surplusize in creating Myspace profile designs. This feature turned into currentlyer a mess, problems, and confusion regarding certain profiles. The whole competition resulted in a enigmatical mess and one could not be sure on what Myspace was stressing. not still(prenominal) because of the customized user profiles nevertheless as well as because of some(prenominal) some other flaws in the site’s design, Myspace was confronted with trade protection issues. Results were spyware (Hesseldahl, 2006), phishing, and spam (Webb, Caverlee, & Pu, 2010).\r\nAnother security upkeep was regarding the profile content. Users were concerned about trust and privateness and even law enforcement officials claimed, â€Å"MySpace is employ by sexual predators to lure teenagers” (Dwyer, Hilt z, & Passerini as cited by Schrobsdorff, 2006, p. 5). The break down problem I want to focalise on is the revenue model. As previously hanged, Myspace operates on revenues from advertising. in particular under the ownership of News Corp, the main localise was on generating revenue. It seemed that Rupert Murdoch solely focused on revenues and zipper else which is a heavy(p) flaw for a social networking site, as it inevitably to focus on the on heart and soulers. In 2006, Google pledged to pay News Corp as many as $900 million over iii and a half years and in impart Google was allowed to provide search services and advertising on Myspace (Piskorski et al. , 2008). For Myspace’s customer it seemed that the site was full of too much unorganized advertising, hence the website appeared unprofessionally (James, 2009). The previously listed problems of Myspace are mainly problems of the time when Myspace lost the competition against Facebook, and reasons why Myspace is not successful anymore.\r\nWith regards to the Business Model canvas by Alexander Osterwalder (2009), I volition focus on the problems based on the following elements: encourage Propositions, get word Partners, Revenue Streams, and Media Channels. The element of abide by propositions â€Å"seeks to clobber customer problems and satisfy customer require with survey propositions” (Osterwalder & Pigneur, 2009, p. 16). I consider this part to be Myspace’s greatest problem regarding the issues of trust, privacy, spam, spyware, and phishing.\r\nFurthermore, the lack of innovation was one of the major problems why Myspace lost that many users who invariably want to take care something new. With its lack of good and new features as well as its undecipherable point of focus, Myspace was not able to deliver cypher on which would result in customers go on to use the social network. From my personal experience, I can say that Myspace fatigued into obscurity whi ch can be backed up by the low number of users now, compared to the time of 2006 when Myspace was at its peak (Snyder, Carpenter, & Slauson, 2006). I was a Myspace user around 2006 as well, when I was 15 years old.\r\nIt seemed to be a meeting point for teenagers and for me it was not any different from the German social networking site ‘Schuler VZ’ except that it is international. However, as time went by, I decreasingly used Myspace as for me it always was too conf use and it could not compete with the German social network. Besides, I got spammed with advertising, random men (who were not at my age) thought it was a dating service, and it simply became boring. Therefore, I can state that Myspace’s biggest problem is that it is not valuable full for the users. Theory\r\nFirstly, I bequeath focus on the value propositions as all the other elements, I chose to focus on, follow up on the value propositions. When looking at value propositions, I would unifo rm to consider the three types of value propositions correspond to Anderson, Narus, and van Rossum (2006), namely ‘all benefits’, ‘ kind points of difference’, and ‘ resounding focus’. In the case of Myspace, it certainly would not be enough to â€Å"simply list all the benefits” (Anderson et al. , 2006, p. 2) since there are too many competitors in the Internet environment that share most of the benefits and values.\r\nThe ‘favorable points of difference’ approach is promising in so far that it distinguishes the valuable points that the competitors do not offer. However, I believe that Myspace does not present many exceedingly valuable aspects over their competitors and therefrom it would be most convenient to concentrate on the ‘resonating focus’. With this approach, I volition focus on â€Å"the one or two points of difference […] whose improvement bequeath deliver the greatest value to the custom er for the predictable future” (Anderson et al. , 2006, p. 4).\r\nIn companionship to that, I ordain of course need to study the greatest competitors with regards to their value propositions in set up to highlight Myspace’s most valuable points of difference. Furthermore, I willing need to explore what customers expect from online social networking, what they value about Myspace, and what they broadly speaking find lacking in the social networking environment in order to develop ideas for a mathematical niche market. Additionally, for this customer value look into, I will need to beam inquiry on focus groups with regards to problems mentioned in the previous section (safety and innovation).\r\nFurthermore, the design is an meaty aspect of the value propositions as well. As I previously stated, the old Myspace design was preferably confusing which resulted in safety problems. Hence, a new design is needed which is unified for every user, yet photogenic and which does not allow bugs. Secondly, in similitude to innovation, I will need to look at the samara Partners who will be part of the re-engineering of the Media Channels as well and concerning revenues. Through Media Channels, the company can transcend with its customers and deliver the value propositions (Osterwalder et al. 2009). Especially in the online environment, cognisance can be raised with the dish of other samara partners. For mannequin, you can share content from one website on another. Not so long ago, Myspace introduced connection opportunities to chirrup and Facebook (Myspace introduces mashup with Facebook, 2010) and also youtube allows sharing videos on myspace. Myspace’s connections to Facebook which will also help to generate user-specific streams according to the user’s Facebook profiles. However, Facebook for mannikin, does not allow a connection to Myspace.\r\nAccordingly, Key Partners are needed that would help promoting Myspace. to a great er extentover, the former revenue model which only consisted of advertising, has prove to be quite annoying for the users, hence Myspace unavoidably Key Partners who will not only suffice the website more appealing solely also help to bring revenue. Hence, search has to be done on Key Partners who are willing to help backing Myspace as well as who would be interested to offer for example applications (which then help the Key Partners as well). As I said before, Myspace dog-tired into obscurity.\r\nFor this reason, I will also need to look at other media transmit such as campaigns and marketing strategies in order to bring Mypsace back to masses’s minds. In that relation, inquiry ineluctably to be done on what marketing strategies worked for successful social networks such as Facebook and also what media channels can help to basically re-introduce a media product like Myspace. Assumptions & Best Practices round First of all I need to mention that Myspace decid ed in 2010 to focus on harmony and entertainment ( to the highest degree Myspace, 2010).\r\nHowever, for now I will only consider online social networking sites as websites that focus on music and entertainment are not Myspace’s greatest competitors. Of course, I will need to take Facebook into account as Myspace’s greatest competitor and as today’s most frequent social network which was the most visited website in June 2011 (Smith, 2011). Facebook first started in a niche market of college students and it got sentience from the very beginning. It did not use any special advertising campaigns to become popular but the progress was rather by word to mouth (Mitchell, 2009).\r\nThe popularity has then been covered by newspaper articles and television which describe on the success (Ibid). Mark Zuckerberg launched Facebook as a unique and intimate website and constantly added new features that kept the site evoke. Facebook is far more innovative than Myspace an d therefore the members keep using it and promote it by word of mouth advertising. Similarly to Facebook, Twitter was ab initio successful in a niche market. At the beginning, primarily computer- and technology specialists as well as bloggers used Twitter for example to promote their blogs (How did Twitter become popular? 2009). Twitter could convince with its simplicity and real manner experience. Real life experience in so far that plurality twittered news from certain events such as the Mumbai attacks or recently the uprisings in Tunisia as different to regular news channels (Ibid). The trounce practices that made Twitter and Facebook successful and popular are therefore word-to-mouth advertising and the Internet itself. Word-to-mouth advertising only worked because of the convincing and interesting designs and usability.\r\nBoth platforms are innovative, as they have been creating new features that make them enjoyable, flexible and interesting (The Success of Twitter, 2011) . Those best practices worked for Myspace as well †in the beginning. However, the task now is to remake Myspace aware to people’s minds and the goal is that the users actually keep using Myspace because of the new design and value propositions. I would arouse sending a short and slick email to the Myspace users which shortly introduces them to the new Myspace.\r\nUsers might want to get to know the new Myspace and then tell people about their good experience. Additionally, since Myspace is focusing on music, an advertising campaign might help to make new bands aware of Myspace’s ability to promote their work. Facebook uses an pugnacious innovation approach, meaning that it comes up with new features that users initially might not like but after(prenominal) a while they cannot imagine Facebook without those new features anymore. Furthermore, Facebook constantly adapts the privacy settings in order to meet the customers’ needs with regards to safety (Blo dget, 2010).\r\nInnovation keeps Facebook interesting and worthwhile to continue using it. Another highlight it offers for their users are applications. many a(prenominal) software developers create applications for Facebook which make the site not only more interesting and entertaining but also help to generate revenues (Stone, 2007). With the help of expose partners, Myspace can get help for its design as well as applications that help to make the site interesting. What is more, key partners help financing; hence Myspace would not only be dependent on advertising revenues.\r\nAs users find the amount of advertising quite annoying, Myspace can focus on less but personalized advertising. Those steps would help to make Myspace more innovative and it can easier meet the users’ needs in terms of design, safety, new features that make it worth to use. interrogation Proposal †Method Myspace needs change! More specifically, Myspace needs a re-engineered business model. The previous statistics furnish that the numbers of Myspace users decline gradually. If this decline continues, the once most popular social network (Bains, 2009) will soon be almost unknown or at least unused.\r\nHowever, with bring forward research on my previously stated ideas based on the problems of Myspace in relation to the Business Model, I will be able to help Myspace creating a new and innovative Business Model that will help to avoid further declining user numbers and to create competitive soundbox in the environment of social networking. In order to study the value propositions carefully, I will conduct qualitative research. Only with qualitative research I will be able to gather in-depth arrest of the reasons why people do not use Myspace anymore.\r\nI can gather such instruction in two ways: finished interviews and through an online research community. With the help of a qualitative research interview I will gather the facts as well as analyze the meaning (Kvale, 199 6). As a result, I will be able to understand the values customers need as well as the reasons and problems which caused the failure of Myspace. By using an online research community, Myspace can put â€Å"the customer at the amount of [the] marketing strategy” (Simon, 2009). Such research communities allow efficient and deep qualitative research online.\r\nIn such a community, members can discuss certain aspects such as new features and designs, and Myspace can adapt accordingly. Besides, a qualitative research online will likely bring more results since people rather take the time to discuss issues online. However, the qualitative Interview will also be needed because it is an additional in-depth abstract with face-to-face communication that enables immediate follow up questions and answers with high reliability. The qualitative research of both forms will be base on current or former Myspace users and also on usual social network users in order to determine the general arget group’s values. Questions for both kinds of researches will for example include what they currently like about Myspace, what they do not like, why they use Myspace, or why they (stopped) using Myspace, what they generally value about Myspace, and their opinions about the competitors such as Facebook. For good measure a detailed research on the competitors and their best practices is essential. This can be done by further online research on the competitor’s strategies in order to find out what could work for Myspace as well. propose\r\nThe following table provides an overview of the estimated time and be for this suffer †subject to modifications. For now, I will conduct the research for three weeks, meaning that for example that the online community will be run for three weeks. Part| epoch| Costs per hour| Costs per day| Creating online community(5 employees)| 8 hrs| EUR 10 (x5)| EUR 400| Leading discussion online(10 employees)| 3 wks (120 hrs)| EUR 8 (x 10)| EUR 9600| Analyzing online community (10 employees)| 2 wks (80 hrs)| EUR 12 (x10)| EUR 9600| underdeveloped questions for both onliny community and interview (4 employees)| 8 hrs| EUR 12 (x4)| EUR 384|\r\nInterviews (5 hrs per day)(10 interviewer)| 3 wks (75 hrs)| EUR 12 (x10)| EUR 9000| Evaluation Interview(10 employees)| 2 wks (80 hrs)| EUR 12 (x10)| EUR 9600| full(a) Costs for staff:| EUR 38584| Further costs: Possible travel costs (for interviewers):ca. EUR 300 Equipment (for Interviewers †recorders and so forth ):ca. EUR 400 Technical equipment for online community:ca. EUR 10000 Total Costs:ca. EUR 49284 The additional costs might not apply if the equipment already exists. All prices are including value added taxes. Reflection In this paper I determined the foundation for a re-engineering of Myspace’s Business Model.\r\n spinal column in 2006 and 2007 I was a member of Myspace as well. However, I never liked this social network much since it was confusing, a nnoying because of all the advertising and I did not feel safe using it. Overall, it did not really work out. Now I am a Facebook user and I totally forgot about Myspace. Apparently, other social network users feel the analogous way which can be expressed by the declining number of Myspace users. Myspace became quite unpopular, fewer and fewer people visit that site and Facebook out-competed Myspace fast.\r\nTherefore I study the problems that resulted in the failure of Myspace. The main boilersuit problem is innovation. Myspace failed to add new features in order to make the platform interesting and worthwhile to keep using it. Myspace totally faded into obscurity wherefore it is essential to re-engineer at the media channels. Also, Myspace did not allow third troupe developers to help designing the page and add for example applications which not only would make the network more entertaining but also help generating revenues other than advertising. Instead, members were able to design their own profiles.\r\nThis feature, however, resulted in an overall confusing design and safety problems. Safety problem arose from the bad software as it was easier to install for example spyware. Myspace could not meet the values that the customers need. Aside from bugs such as spyware, spam and phishing, users experienced a great lack of trust and privacy in that online network. To sum it up, I focused on the re-engineering of the following move of the Business Model Canvas by Osterwalder and Pigneur (2009): repute Propositions, Media Channels, Key Partners, and Revenue Streams.\r\nAll parts of the business model are connected though. That is why I analyzed all parts with regards to the others. My idea is that Myspace needs to be innovative. It can do so in analyzing both the values of customers and the best practices of the competitors and then adapt accordingly. With this method, Myspace can add new feature that will surely meet the customers’ desires. This is connected with a new design and key partners. Key partners can not only help with the design but also with innovation by adding applications that make Myspace more interesting.\r\nFurthermore, key partners would create another method of generating revenues. Then, Myspace would not only depend on advertising revenues and can trend the annoying advertising to unostentatious, user-personalized advertising. After its changes, people need to be made aware of the new Myspace. This can be done with a short and catchy email to Myspace members who will then positively experience the re-engineered Myspace and spread the word. Additionally, television and Internet advertising campaigns might help to bring Myspace to the people’s minds.\r\nI am convinced that those methods and the further research, suggested in form of qualitative interviews, qualitative online community research and qualitative research on the competitors, would help Myspace to survive the competition in the online env ironment of social networks as well as stop a further downfall. References About Myspace. (2010). Retrieved November 1, 2011 from Myspace http://www. myspace. com/pressroom/2010/11/myspace-introduces-mashup-with-facebook/ Anderson, J. C. , Narus, J. A. , van Rossum, W. (2006). Customer Value Propositions in Business Markets. Harvard Business Review.\r\nArrington, M. (2011, March 23). Amazingly, MySpace’s decline in quality is Accelerating. Retrieved October 29, 2011 from http://techcrunch. com/2011/03/23/amazingly-myspaces-decline-is-accelerating/ Bains, L. (2009). Facebook Overtakes MySpace as Most democratic brotherly Networking Site. Retrieved November 2, 2011 from http://www. switched. com/2009/01/27/facebook-overtakes-myspace-as-most-popular-social-networking-sit/ Blodget, H. (2010). Ignore The Screamsâ€Facebooks Aggressive Approach Is why It Will Soon Become The Most Popular Site In The World. Retrieved November 2, 2011 from http://articles. businessinsider. om/ 2010-05-17/tech/29991115_1_ceo-mark-zuckerberg-facebook-s-pr-innovation Business model re-engineering. (n. d. ). Retrieved October 27, 2011 from AMR International http://www. amrinternational. com/services/corporate_and_business_unit_strategy/business_model_re-engineering Cauwels, P. , Sornette, D. (2011). Quis pendit ipsa pretia: facebook valuation and diagnostic of a bubble based on nonlinear demographic dynamics. Retrieved October 30, 2011 from Cornell University Library http://arxiv. org/abs/1110. 1319 Dwyer, C. , Hiltz, S. , Passerini, K. (2007). Trust and Privacy Concern at bottom Social Networking\r\n'