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Information Cascades in a Money-Making Social Network

While popular social networks such as Facebook and Twitter provide a platform for you to advertise your own products and view products created by others, neither of these social networks have a way for somebody to directly earn money through the ad services put forth by Facebook and Twitter due to the page views they get, where instead Facebook and Twitter are the ones gaining the ad revenue. Seeing this as an opportunity for a new social network, the company Tsu was created by Sebastian Sobczak as a means to provide its users a way to make money through their “social impact.” With Tsu’s platform, out of the entirety of the ad revenue obtained by the company on a given day, 90 percent of that revenue is split amongst its users based on the amount of page views it obtains. However, with this model, Tsu suffers some issues with its network model as a way to cascade new members.

When compared to other social networks, where just having a few friends on the same social network as you could produce enough content to switch over from a service such as Facebook or Twitter, because a large portion of this Tsu’s viability is dependent on having having a large amount of people view your content for the purpose of making money, the threshold required of the amount of people you would want on the site in order to switch over would be significantly higher than that of other networks whose purpose is based on the content that they are producing. In addition to this, it is also significantly more important for secondary or even tertiary connections to switch over to Tsu, because once again even though a given person might not be completely interested in the content posted by these weaker connections, because you still want those weaker connections to view your content to make money.

In addition to the difficulty in obtaining its userbase through this social network model, the overarching goal of advertising revenue as a means of joining the issues presents issues with the quality of the website. For example, because one way for Tsu users to gain money is for them to recruit new users to the website, the users of this new social network would end up spending a lot of their time attempting to gain this money through recruiting, which in turn comes from requesting other people to join by advertising in other social networks. Also, because the most significant reason to switch to this social network is due to the possibility of making money, many people that view this message will treat it as spam, since the “friend” on your social network is focusing more on asking you to earn them money rather than posting content with any sort of value. This mentality ended up being pervasive among those who used the website, and because of this incentive to make money through the social network, Facebook treated the plethora of recruitment messages sent to Tsu as spam and thus blocked all results from the website, which would significantly hinder recruitment requests. The culmination of all of these factors will likely combine into a large amount of difficulty in obtaining a large viewer base, thus making this pseudo-multi-level marketing social network unlikely to succeed.


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November 2015