The ties that bind: Social network principles in online communities

In a Web 2.0 environment, the online community is fundamental to the business model, and participants in the online community are often motivated and rewarded by abstract concepts of social capital. How networks of relationships in online communities are structured has important implications for how social capital may be generated, which is critical to both attract and govern the necessary user base to sustain the site. We examine a popular website, Slashdot, which uses a system by which users can declare relationships with other users, and also has an embedded reputation system to rank users called ‘Karma’. We test the relationship between user's Karma level and the social network structure, measured by structural holes, to evaluate the brokerage and closure theories of social capital development. We find that Slashdot users develop deep networks at lower levels of participation indicating value from closure and that participation intensity helps increase the returns. We conclude with some comments on mechanism design which would exploit these findings to optimize the social networks and potentially increase the opportunities for monetization.