Question

Profit is a main goal in any business activity. To gain profit, i) total revenue, ii) total cost, and iii) number of demands, are some of the factors that might affect its value, as discussed in Chapter 2 of this course. There are some companies that offer their products / services for free to the customer, but still making a lot of profit from these products. These products are for example instant messaging applications such as WhatsApp, Telegram, or social media platform such as Facebook, Instagram, video / photo sharing platform such as YouTube, and many more. Besides, there is a say that "if you're not paying for a product, then you are the product". Investigate and discuss how these companies are able to offer their products / services to us without any charges, but at the same time gaining huge profit from the usage and are able to sustain their businesses. Include in your discussion, the theories that you have learn from this course, to support your findings. Besides, you might also highlight the differences of those business models, and any other interesting findings from your investigation.

Answer 1

one of the fundamental principle of economics is "there is nothing like free lunch in the world" and this holds true for the given scenario.

all the mentioned social websites have almost took one or even two decades for their respective growth.they have become the global mode of advertisement and marketing.we can have a look at their revenue sources-

• when any commercial profile is created on the social site then these sites charge high fees to promote the pages/profile.
• whenever any user of these website uses the source they would probably see some advertisement while surfing the site or while watching any videos.these sites pay large sum for their marketing and avail their services concerned with the marketing.
• some online shopping websites like amazon,flipkart etc also advertise through different apps and sites and if any purchase and dealing is made then relevant commission is paid to the source site/application.

therefore these are the main source of revenue for these social sites and due to this they provides us free services and earn through us in different manners.

The digital platform or social networking platform or digital entertainment platforms like Youtube, Facebook, Insta are indeed profit making platform though they may appear free to a end-user.

This is a fantastic business model and is going to stay in the digital world for many years to come. The concept is pretty clear & simple - we spend a major tome of our lives today interacing with digital world. Like it or not what ever age you are in today there is something to pull you to the digital platform.

We leave our digital voice, digital foot prints & remain digitally present on these platform that help them ascertain our digital habits and fine tune programm that suits our digital mind-set. Your smart phone is the bridge to the digital world and is also the passport to exhibit your digital health.

The high paid coder are doing all they possibly could to transfer all the physical activity into digital mental activity. From buying grocery to car today we can doall that without having to step-out of the house on the digital platform throigh pur phones.

With the increase in the number of smart user quite clearly, by now, we must have undertood it is a PERFECT ground for marketting & advertising. And thats from where all the revenue pour in make them giant business house - leaving people wonder whats helping them make huge profits.

These advertisments are tuned according to a users behaviour, taste &preferences which a win-win situaion for everyone involved.