Curiosity driven ‘Evolution of Social Networking Media’

Long time pending blog, I simply love it.

Few years before names like Facebook, MySpace, Orkut, Linked-In and Twitter were jargons or non-existent. But now Orkutting, twitting, poking and liking on Facebook are very common terminologies among people who have some knowledge of internet and social networking media. Yes, as the technology started to diffuse at a rapid phase, people started to use that extensively for getting together with others. But there is also a considerable difference between the evolutions of these social networking websites. This is an attempt to bring together the sociological need of people to get together with others and consequently the evolution of social networking media.
One of the popular successes stories of social networking media is Orkut. Long back the founder of Orkut wanted to search his girlfriend with whom he had lost touch for long time. That was the story behind and rest is history. It led to birth of Orkut which brought and is bringing number of such peoples together daily. After its acquisition by Google, Orkut grew leaps and bounds by reaching almost all the population on internet. People used that extensively for networking with each other. So the basic need of keep in touch with your good old friends and relatives, sharing momentous pictures with friends were adequately addressed by Orkut and its expanding user base community. But recently we notice a decline in the activities on Orkut. People attribute this decline to the upcoming of Facebook and twitter. But going behind the discussion we see a paradigm shift in the needs of people who use Orkut. After Orkut, lot of such social networking sites sprung up. Sites like Linked-In were born to address very niche needs of people like networking with your colleagues and professional communities of people who used that extensively for business networking and job searching. With these kinds of website reaching maturity, which is measured by level of penetration, people looked for some added features in which I should say Orkut failed miserably. Orkut launched number of steps like including gaming etc on their site which didn’t capture the pulse of its target group and here comes the innovation of Facebook and Twitter.
With people getting rapidly contented by getting to know about their good old friends and relatives, the preferences of people started changing. There existed a want for people to better know about their near and dear. This was adequately captured by Facebook and Twitter which solved their basic need of getting together with their near and dears and also allowed them to know better by promoting people to regularly update about themselves. This was a special and dynamic feature of Facebook which allowed people to easily post what they do and what they think currently. This also formed the major part of users’ home page and it forced them to take a look at what their friends are doing, there by satisfying their want of getting to know better about their near and dears. Though this feature was lately introduced by Orkut, this was not as effective as Facebook and didn’t capture users’ attention.
Initially it didn’t make much sense for me to use Facebook but later I became an ardent user of Facebook and I have become an addict to Facebook. Thinking beyond the success and evolution of these sites, I feel that after addressing the basic need of getting together with friends and relatives, people were rather curious to know better about them and wanted to keep up with them daily. The curiosity factor which is an innate need for many of us was very well captured by Twitter and Facebook, which ultimately led to success of Facebook and twitter. Who knows, there might be another innate need within us, later which will be addressed by another social networking website ultimately turning out to be the next success story on social networking media.

My Article in Fin Express@Campus - November 9th edition

Guess im improving on my writing skills :)

Find below my article on Financial Express November 9th edition. It was written for FE@Campus contest and i was lucky :) The topic given was "Corporate governance issues that came to fore with recent Reliance Communication issue of inflating revenue".

“The foundation of any structure of corporate governance is disclosure. Openness is the basis of public confidence in the corporate system and funds will flow to centers of economic activity that inspire trust.” -Sir Adrian Cadbury

The issue of Reliance Communication reporting inflated wireless revenues to bourses for improving its valuation and at the same time underreporting its wireless revenues to TRAI for avoiding license fees is a typical corporate governance problem arising out of multiple reporting standards. Nowadays, a company’s innovations do not stop with its products and extends to finding innovative ways of using the loopholes that these multiple reporting standards provide. According to Parekh and Co., an independent audit firm appointed by DoT for looking over this issue, RCom had reported revenue of Rs. 15,213 crores to the stock markets for FY07-08, a 23% over its actual revenue of Rs. 12,298. At the same time it underreported its wireless revenues to TRAI and doing so it avoided license fee payment of Rs.224.79 crores for FY07-08. Moreover this was not the first time RCom avoided the license fee by underreporting. It avoided Rs.91.11 crores license fee for FY 06-07 by adhering to similar practices as per the Parekh and Co. report.

The above issue raises some serious concerns over the relevance of corporate governance to the corporate performance. The excessive importance for short term profits can have major impact on upcoming sectors like Indian wireless market in a long run. Companies should realize this and adhere to proper reporting standards for its sustainability. But it’s easier said than done due to the different needs of its stakeholders and hence the regulatory bodies need to play a pivotal role. In RCom’s case the regulatory bodies SEBI and TRAI failed to check the consistency of the financials submitted by Reliance communication with each other. The whole issue was brought to forefront by Kotak securities an equity research firm after two years of license fee evasion by RCom causing a total loss of Rs.315.90 to exchequer. When the need for different reporting standards is unavoidable, in such case the different stakeholders including regulatory bodies need to work in liaison to avoid such corporate governance issues.

Even though RCom’s corporate governance issue is no where comparable to Satyam, Enron, WorldCom and Tyco, the seriousness of the issue needs to be addressed properly. This brings to forefront the inefficiency of the penalties that companies might face if in case of any corporate governance issues. The implications that RCom might face if incase proved guilty will be a fine by regulators and the stock price will adjust according to its actual revenues. The impact on stock price might be minimal as the money involved is less compared to other major corporate scandals, and hence will not be effective enough to stop the companies from doing so in the future. Hence a proper watchdog and relatively heavier penalizing mechanisms should be in place to prevent such issues in the future.