Document Type

Article

Abstract

Social networking related services (SNS) become increasingly popular communication and interaction mediums over internet. As most of the SNS are free, the providers generate revenues from advertising and other extension services. This paper investigates the advertising strategy and the strategic of compatibility and co-opetition between two social networking related services.. Utilizing game theoretic model, we show that the providers will benefit from both service and business integration, however, the users are always worse when SNS services are compatibly connected. The users will always gain from the quality (features) competition, however, brand competition may hurt the customers as more disturbing ads will be exerted. In general, business integration will result in a higher diversity if ads exerted in two IM services.

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