Entrepreneurial success,using online social networking:

evaluationJoel Indrupati and Tara Henari

College of Applied Studies, University of Bahrain, Skheer, Bahrain

Abstract

Purpose – The purpose of this paper is to evaluate the effectiveness of online social networking byentrepreneurs in the Arabian Gulf.

Design/methodology/approach – A descriptive research is conducted by interviewing a number ofentrepreneurs in the Arabian Gulf who use online social networks as a method of promoting theirproducts.

Findings – It is found that social networking is a cheap and easy method of advertising and gives allentrepreneurs a better chance of reaching their target market and, thereby, in succeeding in theirventures.

Social implications – With the rise in the use of social networking, entrepreneurs can now targettheir markets using online social networks. Social networking web sites allow businesses to introducetheir products to specific market segments, with low expense, and with a low chance of failure. Thisrising phenomenon of web-based social interaction can change the way businesses operate in future.

Originality/value – The paper explores the possibilities of entrepreneurial success with this newelement, in electronic media, within integrated marketing communications.

Keywords Bahrain, Kuwait, United Arab Emirates, Social networks, Advertising, Entrepreneurs,Online operations, Social networking, Integrated marketing communications, Saudi Arabia, Qatar, Oman

Paper type Research paper

IntroductionThe growth of online social networking web sites such as Facebook, Twitter, LinkedIn,MySpace and Orkut reflects the age-old social need of humans to communicate andconnect with one another. Being social is fundamental to the nature of human beings.We want to use whatever channels we have to communicate, whether it is smokesignals or the net (Daley, 2010).

And if businesses have to reach their customers effectively, they must do so throughthe media that customers actively use. If newspapers, radio and television were thetraditional media vehicles, it is now the online social media. This highly interactivesocial media cannot be ignored by businesses aiming to target specific market segments.

Topping the online social networks is “Facebook” which alone has a staggering halfa billion users worldwide – 585,968,680 users, as on 14 December 2010 (Social Bakers,2010). Still, many of the smallest businesses do not believe their customers can bemarketed to on such sites, according to an August 2010 survey from customer reviewplatform RatePoint (eMarketer, 2010).

There are 7,044,400 members on Facebook from GCC countries alone as of14 December 2010 (Social Bakers, 2010) and the number is growing fast. GulfCooperation Council consists of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia andthe UAE, and together GCC supplies 1/3 of US oil, and owns up to $500 billion

The current issue and full text archive of this journal is available at

www.emeraldinsight.com/1753-7983.htm

Online socialnetworking

47

Education, Business and Society:Contemporary Middle Eastern Issues

Vol. 5 No. 1, 2012pp. 47-62

q Emerald Group Publishing Limited1753-7983

DOI 10.1108/17537981211225853

of US capital (Amadeo, 2010). It is therefore relevant for us to understand howonline social networks are being used by entrepreneurs in this fast-growing ArabianGulf region.

Social networkingOnline social networking refers to:

[. . .] web-based services that allow individuals to (1) construct a public or semi-public profilewithi n a bounded system (2) articulate a list of other users with whom they share aconnection, and (3) view and traverse their list of connections and those made by otherswithin the system (Boyd and Ellison, 2007).

Social networking sites started as early as 1997 with “sixdegrees.com” (Cassidy, 2006),and they grew on. Notable among them are six degrees, Live Journal, Friendster,Linkedin, Hi5, MySpace, Orkut, Facebook, Yahoo!360, Twitter, etc. Some endured. Somedid not. See Figure A1, for the timeline of various social networking sites launched andre-launched by different companies on the internet (Boyd and Ellison, 2007).

Facebook, currently the most popular with half a billion users, began in early 2004,initially only for Harvard University students. It then expanded to include otheruniversities and high schools, then corporate bodies, and eventually was opened topublic in 2006.

The initial popularity of Facebook made it spread so fast that the number ofmembers reached 100 million users in just nine months. According to a popular socialmedia blog called “Socialnomics”, it was stated that if “Facebook was a country itwould be the third largest country in the world” (Qualman, 2010).

Facebook members consist of different races, sexes, and age groups with the fastestgrowing segment being 55-65 year old females (Qualman, 2010).

With this easy access to so many people, businesses have started to realize thatthere is great potential in Facebook, this is a huge socio-economic shift that is changingthe way consumers and companies communicate and interact with each other.

By using social media, consumers, have a profound influence on our economy andthe businesses that operate within it. Online word of mouth and the powerful influenceof peer groups have already made many traditional marketing strategies obsolete.Today’s best businesses and marketers are learning to profitably navigate this newlandscape (Qualman, 2010).

The popularity of social networks, was investigated by PR firm Burson Marsteller,which studied the 100 largest companies in the Fortune 500 list, 79 per cent of them usesome form of social media. Social networking has become so popular that manyinternational companies are now hiring social media analysts, along with their standardmarketing team. Social media has now created a shift in traditional marketing, allowingcompanies to create lasting relationships and one-on-one relationships, as opposed to aone-many relationship, for a very low cost (Gardhamer, 2010).

Facebook statistics show that out of its 500 million active users, 50 per cent areactive users who log on to Facebook every day, with people spending over 700 billionminutes per month on Facebook. A growing number of businesses are makingFacebook an indispensible part of hanging out their shingles. Small businesses areusing it to find new customers, build online communities of fans, and dig into goldmines of demographic information (Pattison, 2009).

EBS5,1

48

Social networks and business revenueAccording to a research by eMarketer, Facebook is expected to earn roughly $1.3 billionin revenue in 2010, which is 50 per cent more than $665 million it brought in, in 2009,and it is further projected to earn nearly $1.8 billion in 2011 (Zaky, 2010).

To others seeking business revenue, Facebook is no longer considered just a socialnetwork; it is considered a gold mine. It has become so popular as a marketing tool,that books and articles in prestigious magazines such as PC World, The Entrepreneurand TIME have articles like “Facebook Ads: Success Secrets from a Facebook Insider”,“How to market your Business with Facebook” and “Boosting Business with aFacebook Fan Page – Starting a Facebook” which are all helping companies maximizeprofit through using Facebook.

A growing number of businesses are making Facebook an important channel tocommunicate with customers. Large and small businesses alike are using Facebook aspart of their marketing strategy. Given below are a six examples/case-studies of howsocial media is helping businesses:

(1) Chris Meyer. “The wedding photographer, Chris Meyer found women aged22-28 in his local area in Minneapolis, and spent $300 on Facebook ads targetingthem in the past two years and has generated more than $60,000 in business”(Pattison, 2009).

(2) Emerson Salon. In 2008, when co-owners Matt Buchan and Alex Garcia decidedto buy and makeover a hair salon in Seattle, Washington, which they renamedEmerson Salon after Ralph Waldo Emerson, they decided that the internetwould be an important focus for their business. Little did they know that twoyears later, 75 per cent of their business would be sourced from Facebook,Twitter and their blog (Swallow, 2010).

(3) Butter Lane. This is a cupcake bakery with an knack for social media. Not onlyare they on Facebook and Twitter, but they also run a Yelp offer and managetheir Yelp venue page, maintain a blog on Tumblr, run group-buy specials onGroupon and LivingSocial, and have a special on Foursquare. How do they keepup with all of it? Co-Owner Maria Baugh said she and her team are avid users ofPostling, a social media management tool that allows businesses to see all oftheir brand activity on various social media platforms all from a single interface(Swallow, 2010).

(4) The Social Man. Jonathan Christian Hudson, founder of The Social Man, a smallsocial coaching business based in New York City, explained the dynamicsbetween coaches and clients. “Our clients have to trust us and like us in order towork with us,” he noted, “and there is no better way I know of to demonstratethat than by putting our faces out there and having a real dialogue with them.”Videos sites Blip.tv and YouTube have allowed The Social Man to get personalwith clients and prospects. Through their channels on both sites, they run aseries called “Ask the Social Man,” in which Hudson and his colleagues answerquestions from “dating” to “doing well in job interviews”, and their clientele isgrowing (Swallow, 2010).

(5) Liberty Bay Books. It is an independent bookstore located in Poulsbo,Washington that specializes in Scandinavian and nautical books. OwnerSuzanne Droppert places a very high value on conversation and the exchange

Online socialnetworking

49

of intellectual ideas. Social media, then, is a natural outlet for a communitythought leader like Droppert. Droppert began experimenting with social mediaafter attending an educational seminar early last year. The presenter absolutelyinsisted the attendees join Twitter immediately. Droppert believes it isimportant to stay connected with online social conversations regarding yourbusiness’ space. She stays abreast on books, travel, food and local events via herstore’s Facebook and Twitter pages. She also keeps the community up-to-dateon book signings and in-store events on the company blog and YouTubechannel (Swallow, 2010).

(6) Feather your nest. Set in the tourist destination of Eureka Springs, Arkansas,“Feather Your Nest” is a specialty shop for homemade and vintage-lookinggifts. You can find them on Facebook, Twitter, Etsy and their blog. Owner GinaDrennon, a web designer and self-starter, is a gem in the rough when it comes tointernet-savvy small business owners in her neighborhood. Eureka Springs is atown where not even use of the internet has begun to blossom among smallbusiness owners. In that type of environment, an entrepreneur like Drennon ispositioned to pull ahead. She made a name for her shop, and she has hadtremendous success. Says Drennon:

I’ve seen our web stats increase, followers increase, interactions increase, and mostimportantly, sales increase. But not only that, I’ve made many meaningful connectionswith bloggers and magazine editors that have featured our products and our store,which bring us huge amounts of attention that you really cannot put a price on. I canpositively say that at least half of the national press we’ve received is due to contactswe’ve made over social media (Swallow, 2010).

Entrepreneurship in GCCThe rapid growth of the GCC economies over the last decade or so has seen a surge inentrepreneurial activities by the nationals. Mostly in the start-ups of small businesseswhich support larger organizations in these countries.

However, only Saudi Arabia and UAE are included, from among the GCC countries,in the 2009 Global Report of the Global Entrepreneurship Monitor (GEM), which is theworld’s leading research consortium dedicated to understanding the relationshipbetween entrepreneurship and national economic development. The report shows apositive outlook from UAE entrepreneurs on nascent entrepreneurship, and newmarkets (Bosma and Levie, 2009). But entrepreneurial activity in the other countries maynot have been significant enough to be included in the sample of 54 countries that thismonitor surveys.

According to this GEM, the entrepreneurial activity is low in Saudi Arabia:

Among factor-driven countries, for example, Saudi Arabia, a rich state with a high reliance onincome from oil extraction, has a very low TEA (Early stage Entrepreneurial Activity) rate at4.7%, and the proportion of necessity-driven entrepreneurship in TEA is also low at 12%.Few Saudis are compelled to create new economic activity out of necessity. But (contrast thatwith) Uganda, the poorest country in the sample, has a high TEA rate (34%), a highproportion of necessity entrepreneurship (45%), and a high discontinuation rate (20%)(Bosma and Levie, 2009).

In the GCC countries, apart from the local governmental organizations, the internationalbodies are also encouraging entrepreneurship by funding, training and developing

EBS5,1

50

entrepreneurs and their ventures. Organizations like United Nations IndustrialDevelopment Organization (UNIDO) have helped in empowering GCC entrepreneurswith knowledge and skill needed to become effective with their new businesses.

Since its inception, UNIDO/ITPO-ARCEIT has conducted 18 EntrepreneurshipDevelopment Programmes (EDP) in Bahrain, which had participants from Kuwait,Qatar, UAE and Saudi Arabia attending (UNIDO, 2010) and learning about investingand managing small businesses.

In Bahrain, an Entrepreneurship Development and Investment Promotion Programme(EDP) is regularly organized by UNIDO through its Arab Regional Centre forEntrepreneurship and Investment Training (ARCEIT) in association with the Ministry ofIndustry & Commerce, the Bahrain Development Bank, the Bahrain Businesswomen’sSociety and Bahrain Young Entrepreneurs Association. The programme, which focuseson the SME sector, consists of classroom training followed by business counselling, duringwhich entrepreneurs receive support in project planning and implementation. ARCEIThas so far trained some 200 Bahraini entrepreneurs, which has resulted in theestablishment of 96 small and medium enterprises. About 270 potential Bahrainientrepreneurs were given advice on business opportunity identification, market analysis,business plan preparation and technology tie-up, which may lead to full-fledged jointventures and financial support by the Bahrain Development Bank (UNIDO, 2010).

In Bahrain, Tamkeen was established in 2006 with a mandate to develop the privatesector as the engine of growth while enhancing the productivity of the Bahrainilabour force as the employees of choice. According to its Annual Report 2009, onfinancing entrepreneurs, 209 beneficiaries obtained loans from Shamil Bank, and1,380 beneficiaries obtained loans from Bahrain development bank with an allocatedbudgets of BD 3.5 million BD 12.4 million, respectively (Tamkeen, 2010).

In Oman, the “Sanad” programme was established by Sultan Qaboos Bin Saeed toincrease employment opportunities and to encourage young entrepreneurs in Oman.The Sanad Programme has so far provided financial support to 28,000 Omanis.Shaikh Abdullah Bin Nasser Al Bakri, the minister for manpower, speaking at thefunction of Sanad Entrepreneurs Award 2010 explained that the programme willprovide loans of between Dh5,000 and Dh10,000 Omani riyals for individual projectsand Dh20,000-50,000 riyals for group entrepreneurial projects (Gulf News, 2010).

In UAE, there is even a special focus on women entrepreneurs. According toRaja Al Gurg, President of the Dubai Businesswomen’s Council:

Two new initiatives have been launched (in 2006) in the UAE to encourage business womento invest in funds that are run by recognized banks and highly recommended investors.“Forsa” is a fund that caters for wealthy women who would like to invest amounts over AED1 million and “Enmaa” is a fund for investors from the business community that wish toinvest amounts starting from AED 1000 (UAE Country Report, 2007).

These fund are used to encourage women entrepreneurs in start-ups.Among the women entreprenuers in UAE who gained success in the recent past

with their businesses are Reem Khalifa Al Mowaiji (Gulf Gifts), Suha Wilson (I quitsmoking) Hiba Shata (Specialized dental clinic), Rania Al Bastaki (Ateej Al Souffashions), Michelle Krugar (Al Hessa marketing), Huda Serhan (Huda SerhanEvent Organizing), Hamdeh Harizi (C Food, Dar Zafaarane, Black Pearl, caviar) andSuad Al Halwachi (Education Zone), who have all been quoted as having determinationto succeed (UAE Country Report, 2007).

Online socialnetworking

51

Howard E Reed, Director of Dubai Women’s College says:

[. . .] our 3,000 working graduates are changing the self perceptions and aspirations of youngEmirati women, and of course the perceptions held by the rest of the UAE population aboutthese capable young women. The next logical phase is to increase the number of Emiratiwomen entrepreneurs.

He also adds:

An impressive 48% of the UAE’s women entrepreneurs that we surveyed are sole owners andalthough they have only been in business for an average of 5.9 years, they are on averagelarger than similar ventures in the USA (UAE Country Report, 2007).

In Kuwait, an interesting case in point is “Pink Taxis”. When Bedoor al Mutairi waitedfor an hour for a lift from her brother after getting a flat tyre in the summer of 2008, shebegan to question Kuwait’s cultural aversion to women riding in taxis. And she cameup with a plan for “Eve Taxis”, or “Hawaa Taxis” in Arabic. She needed capital to starta service. And Kuwait Small Projects Development Company (KSPDC) liked her ideaand agreed that demand for a women’s taxi service existed. KSPDC encouragesentrepreneurs in Kuwait by providing them with a maximum of 80 per cent – up to400,000 dinars – of the capital they need to start a business. Ms al Mutairi said itinvested “less than 100,000 dinars” in her venture. Eve Taxis now has ten pink cabsand plans to operate them on two eight-hour shifts each day. She says, “Now we havesix drivers. I need 20 drivers.” She gets an average of 20 calls a day from Kuwaitiwomen for taxis (Calderwood, 2010):

Here in Qatar, we have already seen many success stories as well. One of such is the founderof the $400mn iGate Corporation Suni Wadhwani who is a graduate of the programme.

Said Mohamed Dobashi, the Associate Professor of CARNEGIE Mellon University inQatar in 2008 during a graduation event of “Corporate Innovation andEntrepreneurship Programme” (Olayiwola, 2008).

The Qatar Development Bank (QIDB), a major financial arm of the government, hasrecently been restructured in order to encourage Qatari nationals to establish smallbusinesses. The QIDB was founded in 1997 and specializes in the promotion andfinancing of small and medium enterprises (Shachmurove, 2009).

Overall, across GCC, we can see a great pitch in the entrepreneurial activity in theregion and can be assured that, with the tremendous changes taking place in the GCCeconomies, the need for entrepreneurs to support various economic sectors is unlikelyto diminish in the near future.

Social networking and GCC entrepreneursLinkedIn and Facebook seem to be at the top of the social media sites when it comes tothe entrepreneurial networks that enable entrepreneurs to communicate and share withone another in the region. While there are some Orkut groups and Yahoo groups, it isthese two social media sites that many people seem to favour.

Like some large organizations, many small businesses and new ventures have alsoset-up their company profiles and group profiles on LinkedIn or Facebook or somesuch similar web sites. These business pages will be update their group’s members –“fans” or those who “liked” their page – on the company’s (or their group’s) activities,events and promotions by figuring in the individual’s newsfeed.

EBS5,1

52

That most companies are embracing social media is evident from the fact that asimple search, done on 10 December 2010, for general companies, and not entrepreneurs,on LinkedIn have yielded results like: Bahrain (667 companies), Kuwait (734 companies),Oman (607 companies), Qatar (846 companies), Saudi Arabia (1,263 companies), andUAE (1,971 companies). So, it is clear that several companies, from these countries haveposted their profiles on this network.

LinkedIn also has “groups”, which help the entrepreneurs, like: the GCC Investors& Entrepreneurs Forum (1,960 members), Saudi Startup Community (375 members),Saudi Entrepreneurs (13 members), Kuwait entrepreneurs (39 members), QatarInvestors, Innovators and Entrepreneurs Forum (381 members), Dubai EntrepreneursGroup (40 members), Indian Entrepreneur Network for MENA (seven members).

With 7,044,400 members on Facebook from GCC countries alone as of 14 December2010 (Social Bakers, 2010), it is a number that cannot be taken lightly. Thousands ofFacebook Business Pages are set up by established businesses as well as entrepreneursacross the GCC, and can tap into its 7 million Facebook users.

Facebook has all these groups for entrepreneurs: Kuwait entrepreneurs(3,678 members), Future Gulf Entrepreneurs Club (17 members), EntrepreneurshipInstitute of the AMIDEAST/Oman (32 members), Leaders and Entrepreneurs ofSaudi Arabia (115 members), Bahrain Entrepreneurs (five members) Entrepreneurs inthe kingdom (495 members), Saudi Startup Community (86 members), Saudi Fastgrowth 100 (437 members), The Arab Young Entrepreneurs Society (149 members),Dubai Entrepreneurs Business Network (DEBN)/Women Entrepreneurs in UAE(100 members), Lebanese Entrepreneurs in Qatar (14 members), PEISA (PakistaniEntrepreneurs in Saudi Arabia) (five members), SMU Business Study Mission (BSM5) –Saudi Arabia, UAE, Qatar & Oman (80 members).

All the above are indicative of the already existent social media networks thatentrepreneurs of the region are exploiting, hopefully, to gain business advantage byconnecting with prospects and customers.

Questionnaire analysis and resultsIn order to assess the number of entrepreneurs using Facebook as a method ofadvertising and to identify the success level of their usage, a questionnaire wasadministrated to over 150 entrepreneurs in the Gulf region. A personal e-mail was sentto each business owner discussing the questionnaire and its relevance to its business.UNIDO which conducts was also contacted and the questionnaire was sent to theirmailing list. A third of the chosen entrepreneurs responded to the questionnaire,making our sample size 50 businesses from the Gulf region.

Our sample consisted of entrepreneurs from different parts of the Gulf region;however, those that responded were mainly from Bahrain, Kuwait and UAE(Figure A2), with nearly 20 per cent being a Single person company, and the remainingbeing Limited liability, with limited Liability, partnership or others (Figure A3).

The respondent’s kind of businesses varied from retailers, service providers,manufacturers, distributors and others (Figure A4). Showing the diversity of oursample and how social networking is not specific to one type of industry, but can beused for all. A total of 61 per cent of the businesses opened their Facebook account in2010, thus having an account for less than one year, making them primarily new onFacebook (Figure A5), for example Diva Beauty Saloon and of S.H. Copywriting who

Online socialnetworking

53

have recently started their practice on Facebook, but yet S.H. Copywriting has alreadygot clients through their Facebook page.

Table I shows the popularity of Facebook in the GCC, targeting a total of6,955,880 potential customers. All of our sample use Facebook as a method of advertising,other social network web sites like Twitter (24 per cent), LinkedIn (10 per cent) and others(12 per cent) were also used (Figure A6). Those that do use Facebook have a chanceof targeting over 30 per cent of the population of the GCC, by simply creating theirFacebook page.

The popularity of each business and the evidence of success of their business pageare apparent from the number of people who have “liked” their business. Figure A6 inthe Appendix shows that the majority of the respondents have over 1,000 “likes” with17 per cent.

Allowing each of these businesses to have access to over 1,000 customers andprovide them with updated information about their offers, services and products.

It also gives the opportunity for interactive marketing, for example businesses takeadvantage of the football fever, and ask their Facebook followers to guess the finalscore of a match giving the fans a chance to win a prize and write on the business’swall. Local businesses like “Choowy Goowy” and “Betty Boop Saloon” used thismethod during the final match of the Gulf Cup 2010, and received over 70 competitionenterers, and over 30 likes each.

The respondents were also asked if they believed Facebook is helping their business,87 per cent believed so, 13 per cent were unsure and none of the respondents answered“no” (Table II). The fact that none of the respondents denied Facebook’s help with adefinite “no” is indicative of their confidence on success through this media at least in thefuture; this is further evident when they were asked if they believe that online socialnetworking web sites help entrepreneurs in general and 98 per cent agreed.

GCC countriesPopulation on

Facebook Penetration of population (%)Penetration of online

population (%)

Bahrain 277,560 37.61 42.65Kuwait 625,140 22.41 56.83Saudi Arabia 3,274,360 12.73 33.41United Arab Emirates 2,135,960 42.93 56.64Qatar 512,060 60.89 117.45Oman 219,320 7.39 17.73Total 7,044,400

Source: Available at: www.socialbakers.comTable I.

Yes (%) No (%) Unsure (%)

Do you think that Facebook business page is helpingyour business? 87 0 13Do you believe that online social networking websites are helping entrepreneurs? 98 0 2

Table II.Facebook helpingbusinesses

EBS5,1

54

The concept of return on investment (ROI) assesses the company’s ability to earn anadequate rate of return (Friedlob and Plewa, 2006). For example, in marketing ROIcould mean the amount of money spent on advertising also known as Return on AdSpend (ROAS), which is used to calculate the revenue from sales minus advertisingcosts, all divided by the cost of advertising (www.brickmarketing.com).

Many marketers argue that the ROI is zero for Facebook, as it is not possible tocalculate. Saying the relevance of people talking about the brand, has no metric value(Fou, 2010; Chong, 2009). However, it also can be argued that the ROI can be derivedfrom the replacement value, for example the cost of direct marketing, which waspossibly through direct contact, e-mail or sms, has now been replaced with zero costthrough using Facebook.

In our research the sample was asked their approximate revenue generatedfrom Facebook. Over one-third of the respondents replied. The average respondentsrevenue yearly was BD3,434 (USD $9,109), in comparison to the cost of opening aFacebook page which is zero. When questioned further it was identified from the datathat these companies were small with under five employees and their main method ofadvertising is personal selling, giving them a personal connection with their customers.This enabled the companies to know how their customers heard about their business,and in return knowing the number related to their revenue through Facebook,and there were businesses like “Pretty Little Things” that use only Facebook toadvertise.

According to a research conducted by Go To Market Strategies 30 per cent ofcompanies spend between 3 and 5 per cent of revenue on marketing, with 45 per centspending over 6 per cent (mainly 6-10 per cent). The sample were also asked what theybelieve to be the percentage of revenue generated from Facebook, 42 per cent said that11-25 per cent of their revenue is generated through Facebook, while 23.4 per cent of therespondents said over 25 per cent of their revenue was generated through Facebook,returning a high number in comparison to the zero spending (Figure A8).

The owner of KeepitSimple, Hussain Ismail one of our respondents who only usessocial networking sites and word of mouth to advertise says:

Social Networking specifically Facebook and Twitter is the future of advertising [. . .] it’s thenew and FREE method for all business to jump on and squeeze to it’s full potential [. . .] theamount of opportunities these services offer are limitless [. . .] A two way communicationwhere the businesses get direct and immediate honest feedback is priceless, no personalselling, TV, magazine ad, or survey’s can achieve this as accurately.

LimitationsAmong the limitations of this study are the following:

. About 72 per cent of the respondents were only from Bahrain, which couldprevent a well-balanced GCC-wide perception, which was expected.

. About 61 per cent of the entrepreneurs who responded started their business inthe last one year itself, which means they could not have had a real long termexperience on the social network’s advantages or disadvantages.

. About 40 per cent of the respondents had marked “others”, and gave no clearindication on what kind of business they are in. More clarity on what kind ofbusiness they are doing would have been useful.

Online socialnetworking

55

ConclusionThe findings of this study have clearly shown that:

. over 87 per cent of the entrepreneurs felt that their social media profiles havebeen helping their businesses; and

. over 98 per cent said they believe that online social networking web sites are infact helping all entrepreneurs.

The fact that 98 per cent of our sample believe that social media is going to help newbusinesses is, however, a perception itself. And a perception need not necessarily be thereality. One must understand that attempting to promote on social media alone, in anisolated manner, is not going to yield results. Entrepreneurs would need to take socialmedia as a part of the “Integrated Marketing Communications” which must beemployed to promote their products and services.

Undoubtedly, online social networking web sites such as Facebook have created anew generation of entrepreneurs, allowing their businesses to be set up and bepromoted with a very low cost, giving everyone an equal opportunity to succeed.

However, some businesses like Silly Billy Games believe that:

Facebook is being used widely because its free, but main users are younger and not the targetmarket for my business. It’s good to get the name recognized, but hasn’t had a major effect ingenerating me revenue.

This is evident from statistics obtained from Socialbakers.com were the majority ofFacebook users are between the ages of 18-24 or 25-34 in the GCC countries.

A great advantage, we believe, is that by attracting attention to their social networkbusiness pages, the new companies will have the member who “joins” or “likes” or “becomesa fan” onto their database, without even asking for it. Then the social media website does thetask of updating or feeding the member on whatever news the company publishes. So, notonly is the member’s “like” informed to his/her friends, but the member can even recommendthe company/products to others. Thereby, without spamming, the company’s information isreaching many people. After all, other people advocacy is the best for any business.As Edelman says “Up to 90% of spend goes to advertising and retail promotion. Yet thesingle most powerful impetus to buy is often ’someone else’s advocacy’” (Edelman, 2010).

On the one hand social networking web sites help entrepreneurs to connect with oneanother, and on the other hand they help in connecting with prospects and customers,a very unique platform to gain competitive advantage. Some have argued it away asfrivolous and only for the young. But the growing number of older members and thegrowing business pages is indicative of the fact that this new marketing tool has cometo stay. Perhaps, for a long, long time.

Whatever the differing opinions, not only is the online social media giving theconnectivity and interactivity, but also enabling display advertising and socialdiscussions on these pages possible which could eventually lead to good profits. Theentrepreneurs can choose their target market segments this way, more effectively thanthrough many other elements of the “Integrated Marketing Communications”.

References

Amadeo, K. (2010), US-Economy – Gulf Cooperation Council, About.US.com, available at:http://useconomy.about.com/od/worldeconomy/p/gcc.htm (accessed 10 December).

EBS5,1

56

Bosma, N. and Levie, J. (2009), Global Report 2009, Global Entrepreneurship Monitor, p. 54.

Boyd, D. and Ellison, N. (2007), “Social network sites: definition, history, and scholarship”,Journal of Computer – Mediated Communication, Vol. 13 No. 1, pp. 210-30.

Calderwood, J. (2010), “Women line up to hail Kuwait’s pink Taxis”, The National, January 20,available at: www.thenational.ae/news/worldwide/middle-east/women-line-up-to-hail-kuwaits-pink-taxis (accessed 13 December).

Cassidy, J. (2006), “Me media: how hanging out on the internet became big business”,The New Yorker, Vol. 82 No. 13, p. 50.

Chong, S. (2009), 5 Common Mistakes When Measuring Social Media ROI, available at:www.penn-olson.com/2009/08/24/5-common-mistakes-when-measuring-social-media-roi/(accessed 10 December 2010).

Daley, J. (2010), “Tearing down the walls – how social media is changing everything about theway we do business”, Entrepreneur, December, pp. 57-60.

Edelman, D.C. (2010), “Branding in the digital age”, Harvard Business Review, December, p. 68.

eMarketer (2010), “Does social media marketing make sense for the smallest businesses?”,eMarketer, available at: www.emarketer.com/Article.aspx?R¼1008054&dsNav¼Ntk:basic%7cFacebook%7c1%7c,Rpp:25,Ro:22 (accessed 13 December).

Fou, A. (2010), The ROI of Social Media is Still Zero, available at: www.clickz.com/clickz/column/1742180/roi-social-media-zero (accessed 10 December).

Friedlob, T. and Plewa, F. (2006), Understanding Return on Investment – Finance Fundamentalsfor Nonfinancial Managers Series, Wiley, Hoboken, NJ, pp. 5-8.

Gardhamer, S. (2010), “4 ways social media is changing business”, Mashable.Com, October,available at: http://mashable.com/2009/09/22/social-media-business.com

Gulf News (2010), “Oman to launch Sanad programme for entrepreneurs”, Gulf News,November 2, available at: http://gulfnews.com/news/gulf/oman/oman-to-launch-sanad-programme-for-entrepreneurs-1.705344 (accessed 14 December).

Olayiwola, N. (2008), “Boost for young entrepreneurs”, Gulf Times, June 18, available at:www.gulf-times.com/site/topics/article.asp?cu_no¼2&item_no¼225103&version¼1&template_id¼36&parent_id¼16 (accessed 12 December 2010).

Pattison, K. (2009), “How to market your business with Facebook”, The New York Times,November 11, available at: www.nytimes.com/2009/11/12/business/smallbusiness/12guide.html?_r¼1 (accessed 11 December 2010).

Qualman, E. (2010), Socialnomics – How Social Media Transforms the Way We Live andDo Business, Wiley, Hoboken, NJ, p. 2.

Shachmurove, Y. (2009), Entrepreneurship in Qatar, Penn Institute for Economic Research(PIER), Working Paper No. 09-025, July 20, available at: http://ssrn.com/abstract¼1436434(accessed 12 December 2010).

Social Bakers (2010), “Facebook statistics by country”, available at: www.socialbakers.com/Facebook-statistics/and “Asia Facebook Statistics” www.socialbakers.com/countries/continent-detail/asia (accessed 14 December).

Swallow, E. (2010), “Five small business social media success stories”, Mashable, June 2,available at: http://mashable.com/2010/06/02/small-business-social-media-success-stories/(accessed 12 December).

Tamkeen (2010), Annual Report 2009, Tamkeen, Manama, p. 38.

Online socialnetworking

57

UAE Country Report (2007), Women Business Owners in the UAE, Dubai Women’s College,Abu Dhabi Businesswomen’s Council and Dubai Businesswomen’s Council, Dubai,December.

UNIDO (2010), UNIDO-ITPO Coordination, available at: www.unido.org/index.php?id¼5083;www.unido.org/fileadmin/import/55498_theBahrainModel.pdf (accessed 12 December).

Zaky, A.M. (2010), “The case for a $50 billion Facebook”, Fortune, August 20, available at:http://tech.fortune.cnn.com/2010/08/20/the-case-for-a-50-billion-Facebook/ (accessed13 December).

Further reading

Brick Marketing (2010), “What is return on advertising spend”, available at: www.brickmarketing.com/define-return-on-advertising-spend.htm (accessed 10 December 2010).

Bursonine, M. (2010), The Global Social Media Check-up 2010, March.

GTMS (2010), Tackling the Marketing Budgeting Process, available at: www.gtms-inc.com/tip_tacklemarketingbudget.htm

About the authorsJoel Indrupati received a Bachelor’s degree in Science, and a Master’s degree in BusinessAdministration from Osmania University, Hyderabad, India, in 1987 and 1990, respectively.He worked as a Marketing Executive for a Bangalore-based IT company for two years then hetaught Marketing and Management courses in Osmania University for five years. Later, heserved as the Manager of Apex Institute of Professional Training, Hyderabad, India fortwo years. In 1999 he moved to Manama, Kingdom of Bahrain, and for seven years, headed theBahrain training center of Aptech-Worldwide, a global learning solutions provider which has itspresence in 40 countries. Since 2007, he has returned to teaching, and is currently in theUniversity of Bahrain’s College of Applied Studies.

Tara Henari completed her Degree in Business Information Systems from the University ofBahrain in 2002. She worked for an IT company and moved on to work for Microsoft Bahrain.In September 2004 she moved to Manchester, UK to complete an MSc in Managing Businesswith IT. On completion, in September 2005, she moved back to Bahrain to work for theUniversity of Bahrain as a Lecturer in the IT College, which was then internally transferred tothe College of Applied Studies, where she teaches management, economics and informationsystem-related topics. Tara Henari is the corresponding author and can be contacted at:thenari@asc.uob.bh

To purchase reprints of this article please e-mail: reprints@emeraldinsight.comOr visit our web site for further details: www.emeraldinsight.com/reprints

EBS5,1

58

Appendix

Figure A1.Timeline of the launch

dates of many major SNSsand dates when

community sitesre-launched with SNS

features

Launch Dates of MajorSocial Network Sites

Six Degrees.com

Live Journal

Black Planet

MiGente

Cyworld

Friendster

Couch surfing

MySpaceLast.FMHi5Flickr, piczo,Mixi, Facebook (Harward-only)

Dodgeball, Care2 (SNS relaunch)

Hyves

You Tube, Xanga (SNS relaunch)

Asian Avenue, Black Planet (relaunch)

Bebo (SNS relaunch)Facebook (high school networks)

Facebook (corporate networks)

Cyworld (US)

MyChurch, Facebook (everyone)Twitter

Windows Live Spaces

QQ (relaunch)

Ning

Cyworld (china)

Yahoo! 360

Catster

Multiply, aSmallworldOrkut, Dogster

Tribe.net, Open BC/XingLinkedin

Skyblog

Fotolog

Ryze

(Six Degrees Closes)

Lunar Storm (SNS relaunch)

Asian Avenue

'97

'98

'99

'00

'01

'02

'03

'04

'05

'06

Source: Boyd and Ellision (2007)

Online socialnetworking

59

Figure A3.The type of business

40%

6%

Partnership

Single Person Company

With LimitedLiability

Limited Liability Co.

Other

38%

8%.8%

Figure A4.Kind of business

6%.

2%

4%

42%

10%.6%

30%

Real Estate

Others

Agriculture

Distribution

Service

Manufacturing

Retail

Figure A5.The year the businessesopened a Facebookbusiness page

70%

60%

50%

40%

30%

20%

10%

0%

4%

Three Yearsago (2007)

Two Yearsago (2008)

One Yearsago (2009)

Under aYear (2010)

16% 18%

61%

Figure A2.The respondents country

2%16%

10% Bahrain

UAE

kuwait

Saudi Arabia72%

EBS5,1

60

Figure A7.Number of “likes” each

business has

6%

19%35%

10%

10%

10%.

0-50

51-100

101-300

301-500

501-750

751-1,000

Over 1,000

8%

Figure A6.Social networks used by

the entrepreneurs

100%

80%

60%

40%

20%

0%Facebook LinkedIn Twitter

24%

10%

96%

12%

Others

Figure A8.Percentage of revenue

Facebook members arecontributing to total

revenue

45%

40%

35%

30%

25%

20%

15%

10%

5%

0%None less than

10%11% - 25%

23.40%

42.55%

23.40%

10.64%

26% ormore

Online socialnetworking

61

1 Leaves Wedding2 IMPACT Events Management3 Craig consultants4 Clever Cupcakes Bahrain5 Mine Co W.L.L6 MJ7 KEEPITSIMPLE8 Let Them Eat Cake9 Cuppycakez

10 SPUD11 Lavanda Spa12 Silly Billy Games13 Nosa cuppies14 SMS Design & Performance15 BlackBerry Shop Arabia16 Hembish17 Designers lounge bahrain18 Loolas19 A Little Sugar20 S.H. Copywriting21 Jewels by Sogol22 102 Beauty Salon23 Masahati.com24 Colour Sugar25 Diva Beauty Salon26 Me Time Nail Spa27 Turathi Sweets28 Lightspeed29 Wall Sticker it!30 ARAM31 B.Special32 DarUSHA33 Victus Food Development Company34 Balloonee35 Btuboutique36 Frescato Sweets37 @bahrain38 SN Collection39 Mariana aquarium & Chocolates40 Hexa Vision41 Organika food co42 DETALING KING’S CENTER43 Loyalty Palace44 Quantum Dynamics45 Personal46 Reina Creations llc47 KFAA Public Relations48 Curve Jewellery49 Pretty Little Things50 United Enterprises

Table AI.List of companiesparticipated in theresearch

EBS5,1

62