Social Media and Ashton Kutcher Where celebrities go, fans follow. The truism applies as much in social media as in the real world, David Karp noticed after famous artists began using his blogging service Tumblr. As a result, encouraging celebrities to set up accounts on the site has become "absolutely part of our road map and our business plan," Karp says.

In fact, he recently hired a full-time employee to help high-profile users design and manage their blogs. It's no secret that well-recognized players in a host of fields-from acting to athletics, music to politics-are using social media sites to connect with fans and promote their brands. Celebrities used to seek out promotion "in People magazine or Vogue," says Robert Passikoff, president of Brand Keys, a researcher that tracks the value of celebrity brands. "It's now become a necessity to have a Facebook page."

But the benefits go both ways. Sites benefit greatly from the online cavalcade of stars. Oprah Winfrey's debut on microblogging service Twitter sent visits to the site skyrocketing 43 percent over the previous week, according to analytics firm Hitwise. Facebook, Google's YouTube, Ning, and other Web 2.0 destinations have also seen swarms of activity around the profile pages of their famous members. And like Tumblr, social sites are going out of their way to keep the celebrities happy and coming back. Obama on MySpace, Facebook, and Twitter The Obama administration created profile pages on MySpace, Facebook, and Twitter.

To accommodate 1600 Pennsylvania Avenue, News Corp.'s MySpace agreed to build ad-free pages and equipped the profile to get automatic updates from the White House's official blog. In some cases social networks give VIPs a heads-up on changes. Facebook worked with the handlers of select celebrity members to get feedback on the new design of the site before it was opened to the public. "We don't have a formalized support program for public figures, but we do offer some support," says Facebook spokeswoman Brandee Barker. Some privileged members of Facebook have also been assigned "vanity URLs," or short, simple, personalized web addresses such as www.facebook.com/KatieCouric .

Elsewhere the perks of fame are offered up more casually. Twitter co-founder Biz Stone credits high-profile users like actor Ashton Kutcher and basketball professional Shaquille O'Neal for bringing attention to the site of 140-character messages but says the company doesn't reserve any "special resources" for them. "Sometimes celebrities who love Twitter stop by and say hello," Stone says. "It's usually just a quiet tour and a lunchtime chat but it's really fun for us." John Legend Taps Tumblr In addition to their promotional value, social networking celebrities represent a potential revenue source for these young start-ups. Tumblr helped musician John Legend design a professional-looking blog that matches the look of his promotional site, created by Sony Music Entertainment. Tumblr's Karp says he took that project on at no charge-in part to bring in Legend's fans but also to explore whether it makes sense to offer similar services at a cost.

"For people who want the reach on our network, who want to be able to take advantage of our platform, at some point this does turn into a premium service," he says. Ning already collects monthly fees from some of its users, many of whom are celebrities. The site is free for anyone who wants to build their own social network but charges as much as $55 a month to users who prefer to keep their pages clear of ads or who want to collect revenue generated by ads on their pages. Although the service is not exclusive to stars, many of the most successful networks on Ning draw on the fame of their operators, including hip-hop artists 50 Cent and Q-Tip, rock band Good Charlotte, and Ultimate Fighting Championship titleholder BJ Penn.

"The next generation of celebrities and social networks is in much richer and deeper collaborations [with fans] than what you see today on the more general social networks out there," says Ning CEO Gina Bianchini. Many big names in business, including Dell CEO Michael Dell, use professional networking site LinkedIn more as a business tool than to amass legions of followers. Whatever their reasons for being on the site, LinkedIn uses the fact that executives from all of the 500 biggest companies are among its members to encourage other businesspeople to join the site, too.

Questions
1. Do you consider Facebook, MySpace, and LinkedIn forms of disruptive or sustaining technology?

2. Create a list of the online businesses discussed in the case and determine if they are examples of Web 1.0 (ebusiness) or Web 2.0 (Business 2.0).

3. Describe the ebusiness model and revenue model for Linked In, MySpace, or Facebook.

4. What is open source software and can a business use it for a social networking platforms?

5. Create a plan for how a start-up company could take advantage of Web 3.0 and generate the idea for the next great website.

6. Evaluate the challenges facing social networking websites and identify ways companies can prepare to face these issues.