Maybe it’s just me, however it sure seemed like well before your website had a #1 box office film bearing its story and grossing a good $23 million in its opening weekend, Facebook and the remainder the sites that compose the social media phenomenon were already ubiquitous in our society.
In reality, I think Facebook and Twtiter have grown to be so mainstream, you might produce a wildly successful frat party drinking game out of how usually the logos are punching us in the facial skin, a not exactly 24/7 occurrence these days:
1. Grab an 18 pack and three buddies.
2. Everyone crowd round the TV, and making use of your remote, scan through commercials.
3. Anytime the players see or hear a solicitation by the company or spokesperson in a commercial soliciting viewers to “follow them” on Facebook, Twitter, or some other social networking site, or flashes the logos on the screen, each player must drink.
4. The last person to drink loses, and has to follow Lindsey Lohan on Twitter for another 6 months.
OK, so my penalties are a tad too harsh, but the purpose is that people, organizations, companies, and well, everyone are piling into social media and online networking sites by the (probably) billions everyday – the classic “craze” signature of a bubble – and that kind of inflation and obsession can’t sustain forever.
The social media bubble isn’t your typical bubble, however, as the sites we belong to aren’t really a tool with any monetary value to us Sydney Brooke Simpson. But I don’t believe means it couldn’t pop, and when it does, which social media companies will survive, and that will be caught naked and void of value, importance, and relevancy?
Is social media in a perennial bubble? Listed below are three profound points for you to choose for yourself.
“So, where’s the money going to come from?”
If there’s a very important factor we ought to have recinded from the Dot-com bubble in 2000, it must be that creating and investing money into a company should come after the company’s founder have decided (or at the very least picked) a revenue model. The epic failures of larger-than-life sites back those times, with names like toys.com, pets.com, and hundreds more, sunk themselves among a mad gold-rush to obtain a website live and drive traffic without the real consideration how the company would definitely generate revenue. People publicly dedicated to the firms anyway, and lost billions when it popped.
Have we made no progress in 10 years? The social media sites of today resemble nearly flawlessly, from an economic and business perspective, those goofy, worthless Dot-com bubble companies. The flight to launch is the same: some suave entrepreneur comes up with the concept, a friend or a small team of programmers launch your website, and the traffic pours in because it’s free. There’s a formula at play: create something that’s free, launch it, seek venture capital investors, and grow the website, but don’t necessarily be concerned about revenue because you might always fall back on advertisers.
“Just how do we earn money?” said the VC, as he writes a check always for half a million dollars.”Oh, don’t be concerned about that. We’ll figure it out later. At this time, we want traffic” I could hear some skinny, pimple-faced, flip-flopped 20-something encouraging his partner. Still need more proof? Just read the real history of Twitter, an internet site with over 100 million users and still, no clear plans on how to generate revenue.
There’s no real value
Readers who’re devotees to social media sites will probably balk at this statement, and everyone is unquestionably entitled to their opinion. But the truth is there’s really no sustainable economic value in social media networking websites. While Foursquare is an appealing GPS enabled platform that enables for small businesses to advertise themselves with virtually limitless bound, I think in the end, social media all together brings nothing to the world’s table but advertisers and get-rich-quick internet entrepreneurs who want your disposable money.
Facebook’s mission statement is always to “help people communicate more efficiently making use of their friends, family and coworkers” ;.Since when did humans, the most socially advanced creatures in the world, begin suffering from the need to communicate more efficiently with this friends, family, and co-workers? And so just how valuable are those relationships anyway? When I look at my Facebook profile and see 565 friends, I think wow – either I have plenty of acquaintances or I’m quite a popular guy (knowing that in the back of my head, the latter is probably not the case).
There was a period, and not too long ago at all, when Silicon Valley was rampant with brilliant scientists creating and continues to produce incredibly powerful inventions and innovations like semiconductors, micro chips, and the Internet. Companies that are universally credited with drastic life-altering innovations like Microsoft, Sun Microsystems, and Google have brought a measurable economic affect the world’s societies. Today, I wonder if it’s just packed with app developers bent on dreams of making several million overnight selling virtual farms to anyone who’d actually be willing to buy it.
Consolidation
As with other famous and historical asset bubbles, in the length of the evolution of social media networking websites, you will have rampant consolidation and spectacular companies imploding on themselves beneath the influence of a dangerous cocktail of overwhelming debt and influences the I’ve mentioned above. There’s no need to worry, though; even after the Dot-com bubble, not merely did many Internet companies survive, however they thrived in the years following including Amazon, eBay, and more, and the same fate lies for social media and networking sites.
In researching for this information, I came across a tiny flurry of press releases from obscure social media-related companies have been merging together, including an advertising firm and European’s largest blogging platform, both in separate instances and deals.
And rumors continue steadily to fly today ever since Facebook released news that they’d be creating a big announcement today shortly following a publicized partnership with Skype was announced last week. Perhaps it’s the anticipated integration of voice and video chat for the Facebook platform, but whatever it is, rest assured that consolidation on the list of strongest and the weakest social media sites is coming, and likely in a much bigger fashion that both of these are exhibiting.
A minumum of one social media site has failed this year, and a reasonably substantial site at that. 12 Seconds was a user-generated website that allowed users to generally share videos with each other. As a member on the internet site, I received a message three days ago from the company that basically said 12 Seconds is shutting the doors, thanked several select key people in the company, thanked the users, and that was it. The site will undoubtedly be turning off October 22nd.
Could this be the start of the end of the rampant and infectious social media websites, or are we just warming up? I’d like to just say that I’m a prolific Facebook, Twitter, LinkedIn, and YouTube user, and will continue to become listed on and use social media networking sites because I like what burgeoning technology provides to me. Unfortunately, I am also an economics student, and with that can come speculation on everything bubblish.