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Business models in strategic management
Business models in strategic management

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3.2 Community provider

Online platforms where individuals interact for different reasons are not a new phenomenon, but they certainly became well-known with the diffusion of Facebook. Numerous other platforms also exist, including LinkedIn, Twitter and Instagram. Individuals interact because they share interests or friendships, or want to buy and sell goods or services.

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The main source of revenue for the provider is advertising on its online platform. In some cases, such as online dating, there may be a subscription fee based on a freemium model where some features are enabled by the payment of a monthly fee. In other cases, such as comparison sites, there could be revenues generated by referrals when a purchase is made upon the suggestions of some advice from the community leading to the affiliate website.

As advertising is fundamental to generating revenues, it is important to keep the interest in the community high. When the community is thematic (e.g. medical advice, technology assistance), community members require frequent guidance, suggestions and recent news. Given these needs, the breadth and depth of knowledge of the moderators, facilitators or experts of the community enable the possibility of keeping the conversations alive and offering support to members. Skilled personnel who run the community and viral marketing techniques may enhance the possibilities of success.