The social media industry has exploded since MySpace was bought by NewsCorp in 2006. Since then several industry giants have sprouted up. These organizations serve a variety of purposes such as connecting friends and family, spreading news, allowing people to find love, and even getting your new job. This has created an explosion of information about any topic you could possibly think of, including your personal information.
I was talking to a friend of mine this morning about how social dynamics have changed forever because of platforms like Facebook and Pinterest. Dating has now turned into more of a job interview, you now know the life story of people who you would have never of been in contact with again 20 years ago, and pictures you upload will be stalked by people you’ve met once a regular basis. On top of that people can easily share their interests and passions easily with the world.
It is undeniable that the way we interact socially has changed because of social media. Now companies like Yelp and Twitter are trying to figure out a way to become profitable in the long-term.
But is this industry something that should be made into a business? Facebook is one of the first social media website to take this step by going public. A large percentage of Facebook’s revenue essentially comes from aggregating information that people post in their profile and allowing businesses to target potential customers based on that information. Whether or not Facebook will be successful with this business model there still exists a moral question as to whether the organization should profit on something so personal. With privacy being so important, companies like Facebook risk public backlash if it keeps trying to find new ways to profit from user information.
On top of that Yahoo recently came out with a story that talks about how social media sites like Facebook, despite their popularity on Wall Street, have no real value in the long run. This is apparent from the dip in stock price that social media companies like Facebook, Pandora, and Yelp have experienced since their debut on the market. There are several more up and coming companies, like Pinterest, that are trying to make their name in social media. With so many organizations up-and-coming and no substantial proof for long-term success, are we seeing the next bubble burst?
I will definitely be making sure to keep my eye on this trend, and until I see a proven business model, I will be staying away from social media stocks.
It is undeniable that the way we interact socially has changed because of social media. Now companies like Yelp and Twitter are trying to figure out a way to become profitable in the long-term.
But is this industry something that should be made into a business? Facebook is one of the first social media website to take this step by going public. A large percentage of Facebook’s revenue essentially comes from aggregating information that people post in their profile and allowing businesses to target potential customers based on that information. Whether or not Facebook will be successful with this business model there still exists a moral question as to whether the organization should profit on something so personal. With privacy being so important, companies like Facebook risk public backlash if it keeps trying to find new ways to profit from user information.
On top of that Yahoo recently came out with a story that talks about how social media sites like Facebook, despite their popularity on Wall Street, have no real value in the long run. This is apparent from the dip in stock price that social media companies like Facebook, Pandora, and Yelp have experienced since their debut on the market. There are several more up and coming companies, like Pinterest, that are trying to make their name in social media. With so many organizations up-and-coming and no substantial proof for long-term success, are we seeing the next bubble burst?
I will definitely be making sure to keep my eye on this trend, and until I see a proven business model, I will be staying away from social media stocks.
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