 Welcome back everyone today. We're going to talk about how technology affects The the business model we talked about before so the last lecture I talked about business identity What a business hopes to achieve, right? And then customers who are the customers that the business has and who could the customers be and then the product itself Right, so what what product does the company actually provide to its customers, right? Is it a object like a marker? Is it a service like, you know, support or something like that? Okay So I'm specifically interested today in talking about how IT affects these kinds of things. So for example Think about any new company that is completely based on IT What companies come to mind whenever you think of IT companies? Well, maybe especially if you're Korean You probably think of something like neighbor Right, maybe Kakao talk Kakao Kakao, I think that's okay, so Identity neighbor and Kakao you can probably think of Google or some of these other companies If you think of technology companies, well What is the actual identity? What's the goal of these companies? Well, if you think of neighbor Their goal basically is to make everything searchable, right? They're basically is a search engine, right? So they take information from a bunch of different sources and then try to make it as usable as possible for everyone What's Kakao talks goal Basically, they want to be a big social media company. So I'll say make people social Right, is that their goal to make people social or is it just to help communication or Is it something else? Right? What are what are the goals of these companies if we think of them? We probably think make information searchable make people social make people communicate more But is that really their goal? We don't know Maybe somebody knows we would have to go actually talk to somebody and find out Think of neighbor and Kakao talk. Who are their customers? Who is the customer for neighbor and Kakao talk? Well, let's think about how they make money Does it cost anything to use neighbor? No, it's a free search engine so everyone can go to their search engine and Use their services for free or We think at least somewhat for free, right? Where does the the cost? For us actually come in Well, the cost comes in advertisements I'll just put ads both for neighbor and Kakao talk Kakao uses a lot of advertisements as well So neighbor and Kakao talk even though we're using a service for free. They're showing us advertisements and Believe it or not advertisements take up your data. They take up your time. They take up space on your computer Advertising costs you a lot of time just at a very small amount per page Basically, so you have to wait for the page to load a little bit longer because of advertisements things like that So the cost so the customer is actually in time Right, so even though we're using something for free It's costing us more time to use that service rather than another service That that would be free that would not be free Imagine if we paid for a service and it removed the advertisements. Well Then we would actually be saving time, but we would pay for it How else do they make their money? Well for those advertisements people pay neighbor to show advertisements so ad from ads from businesses So actually the customers of neighbor are Businesses that are paying them to show advertisements, right? so the customers the main customers are in the case of neighbor the businesses that are paying for advertisements and Somewhat the customers that are going to the website and looking at the website But mostly the businesses that are paying as well as the shareholders Right, so the shareholders are kind of investing money and Neighbor is trying to pay them back basically so the customers are a lot of different people But the customers are not you Unless you are paying for their ad services or paying for their services. You're not their customer You are their product actually. Okay, so their product speaking of product is eyes Right what they want is people to look at their web page that way businesses pay them more money So their customers will pay them more money depending on how many eyes they have right so you are their product They made a web portal that a bunch of people will actually go to that way They can sell you and your information to other people now. Is this strange? I'll put you You you are the you are the product. Is this a strange business model? No a lot of tech companies Have this type of business model because technology makes it so easy to put eyes in front of Advertisements right if they have a very popular portal monetize through advertising then your users become the The product right so whenever neighbor is making Decisions most of their decisions most their motivation is going to be based on the business Customers not necessarily the users. So for example user privacy Does it make them more or less money if users have less privacy like it makes them a lot more money? That's why Google we have so much trouble with Google All around the world because Google is trying to make you the product And they are really good at doing analytics about all of your personal information Facebook right now is also having the same effect. They're collecting way too much information And they are basically able to predict a lot of things about people and identify people That's a problem because online whenever something is free You are not the customer. You are the product if you're paying for it. You are the customer Now this is kind of the same through a lot of different Different portals the Cal talk does a little bit of the same but Cal talk also sells things So for example, they sell Or they have a platform for selling for example Stories books things like that. So for example books Now they have cacao bank Right, so they make money off of banking transactions or doing the transactions online So they're actually providing some other services. Now the bank also costs you money and fees and things like that Books people buy the books. So they provide a free platform. So that way customers Can buy books that other people have written. So by being the platform They give a way for people to create content on their platforms that they can then sell So cacao talks a little bit different than Naver for example because their customers or their Business model which we'll talk about business models a little bit later. It's a little bit different They're trying to provide a lot of different services whereas Naver is basically providing eyes Right and Naver has a lot of other companies that are doing a lot of other things as well So the reason that this is so interesting is because this is an advertising model that existed before technology But was revolutionized by technology because now everyone has a smartphone in their pocket Which means eyes you have access to more eyes than ever before You know eyes of kids eyes of adults everyone using technology all the time So this type of advertising model really drives a lot of business which is why Ad blocking is such an issue for these companies because they base their entire business model around advertising Which means that the customers are not the ones accessing the things for free So technology this is one example of how technology has kind of changed at least the way that content is created And who we are working for we think that Naver cacao talk Google all of these companies are actually working for the end user The end user doesn't really pay very much but businesses and advertisements pay a lot If you look at news agencies now a lot of news agencies in Korea almost completely rely on online advertising because it makes them so much revenue So this is just one way to think about a company and who are the actual customers in the company what does the company do So what is their identity what do we think they do well we think Naver is a search engine The search engine is for the end user no that's just a service to get the end user to come to their website Who are their actual customers people who are buying advertising space and probably their shareholders most like their shareholders Who is the product then is a search engine a product they probably don't make any money on the search engine They probably make but they do make all of the money on advertising which is your eyes right So in terms of what they actually provide as a service the search engine is not their main business and same for Google and all the other big search engines as well So we'll talk more later about how this or how technology affects these kinds of business models and specifically some business models that major IT companies use But first we'll talk about the technology that businesses are using to make all of these things possible in the first place Thank you very much