The Journal of Supercomputing

, Volume 70, Issue 3, pp 1297–1317 | Cite as

On studying business models in mobile social networks based on two-sided market (TSM)

Article
First Online:

Abstract

In contrast to the huge popularity of Mobile Social Network (MSN) services, not sufficient attention has been reserved to the dynamics of revenue streams and business models in MSN. In this paper, we investigate how a two-sided market (TSM) formulation can be used to provide insight for the problem above from the perspective of MSN platform. Intuitively, MSN service platform could be described as a two-sided market, in which the critical feature is indirect value flow (indirect network externality): one/both sides of the market benefit from increasing adoption and/or consumption of the other side. For instance, participants, like consumers and the third service providers (or advertisers), are the “two sides” of MSN platform. In this paper, our contributions are threefold. First, we thoroughly characterize the economic features of MSN as TSM, including mobility, network externalities and herd effect, as well as long tail property. Second, we provide the various revenue streams within the framework of TSM, including advertising, subscription, and transactions, and characterize the basic components of general business model in MSN. Finally, the free plus premium (Freemium) business model in MSN is formally analyzed. Specifically, we quantitatively characterize the relationship of participation levels among free and premium users as well as service providers, and illustrate the mutual enhancement among those participants. And moreover, Freemium is theoretically compared with the traditional business model with no free users (NF model). The numerical results show that, in Freemium, the participation levels of premium users and service providers, as well as the profit of MSN platform always exceed the corresponding terms in NF model.

Keywords

Mobile social networks (MSN) Two-sided market Revenue streams Business model Freemium 
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Notes

Acknowledgments

The work was sponsored by the NSFC Grant 61171092, JiangSu 973 project BK2011027, and Huawei Innovation Research Program.

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Copyright information

© Springer Science+Business Media New York 2014

Authors and Affiliations

  1. 1.Jiangsu Key Lab of Wireless CommunicationsNanjing University of Posts and Telecommunications (NJUPT)NanjingChina
  2. 2.State Key Laboratory of Networking and Switching TechnologyBeijing University of Posts and TelecommunicationsBeijingChina
  3. 3.College of Telecommunications and Information Engineering, Nanjing University of Posts and TelecommunicationsNanjingChina
  4. 4.Waseda UniversityTokyoJapan
  5. 5.Hosei UniversityTokyoJapan

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