International Journal of Virtual Communities and Social Networking, 2(3), 31-41, July-September 2010 31 Copyright © 2010, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. Keywords: Business Models, Cloud Computing, Electronic Markets, Resource Sharing, Social Networks 1 INTRODUCTION The Internet and the World Wide Web has profoundly changed society and business – in education, healthcare, research, defense and economy. The underlying computing and com- munication infrastructure which has enabled these changes is now being used to support a “service-oriented” computing economy. The resulting markets that we envision will enable both owners of home computers and established business to trade their excess capacity for a va- riety of incentives (such as monetary rewards, service credits, software maintenance contracts, advertising revenue etc) and enable the creation of capability by aggregating software services from multiple providers. In the same way, eco- nomic models associated with social media on the Internet have been driven by user numbers; hence the greater the number of individuals that can be attracted to visit a Web site, the greater the likelihood that an advertiser will be able to attract them to their own Web portal. Whereas search engines have primarily focused on asso- ciating advertisements with responses returned from user queries, social networking sites are able to take advantage of interconnectedness between users and the various information that users selectively reveal about their interests to the social network site. According to a report by the Office of Com- munications (Ofcom) in the UK (Ofcom, 2008), Business Models for On-line Social Networks: Challenges and Opportunities Omer Rana, Cardiff University, UK Simon Caton, Karlsruhe Institute of Technology, Germany ABSTRACT With the increasingly ubiquitous nature of social networks and Cloud computing, users are starting to explore new ways to interact with and exploit these developing paradigms. Social networks refect real world relationships that allow users to share information and form connections, essentially creating dynamic virtual communities. By leveraging the pre-established trust formed through friend relationships within a social network “Social Clouds” can be realized, which enable friends to share resources within the context of a social network. The creation of Social Clouds gives rise to new business models through collaboration within social networks. In this paper, the authors describe such business models and discuss their impact. DOI: 10.4018/jvcsn.2010070103