Are you sociable? Do you have a legion of friends and followers? Are you “liked”? In the last few years, Social Media has grown from being a personal entertainment platform to become a major marketing tool. Those of us who have been in the business just before the dot-com bubble burst must experience an increasing sense of déjà vu. According to Dan “personal branding guru” Schwabel, living in a shell, however, is no longer an option– with most prospective employers checking LinkedIn profiles you just will not find a decent job if you do.
Twitter started as a rather annoying personal communicator- people were sharing their moods and updated everyone who would listen on every miniscule development of their lives- from “OMG, saw Madonna; she’s so slim!” to “Had breakfast, cereals seemed soggy”. Either way, many did not immediately see the point of it all. It took just a few people with peculiar sense of humor and… voilà- we write novels, confess sins and even quit smoking, all using an instant messenger. Today, it’s a rare company can afford not having an account- how else would it calm the passengers of a derailed train? How would it tell them where to get help and how would it apologize? Naturally in 140 characters, how else? It is hard to imagine what life was like before the digital coup.
Source: The Wall Street Journal
Founded in 2006, Twitter was offered $500 million by Facebook just two years down the road. Last month it has raised funding that puts its value at around $3.7 billion. 740% growth in two years is very impressive by any standard. As we all found out a few days ago, Facebook is apparently worth $50 billion- 25 times last year’s revenue. The company’s value has grown 6,666.67% in under five years. Diabolical numbers aside, the index seems to reflect a feeling, a trend, an expectation of exponentially growing ad and app revenue streams, which is pretty much the definition of a stock market bubble.
Source: The Wall Street Journal
Despite some good points against their assessment, it is hard to argue against the savvy of Goldman Sachs- surely “a great vampire squid” knows what it is doing. Leaving economic analysis to people who do it for living, I would like to quote a piece I stumbled upon a short while ago. Posted in early April 2006, it puts the current hype in a little perspective.
“ATR’s (American Technology Research) Rob Sanderson points out that MySpace is the fastest growing property on the Internet, perhaps in Internet history and traffic now exceeds all but Yahoo. comScore data shows that MySpace had 37 million unique visitors in February ’06, up five-fold from a year ago.”
Even the omnipotent Rupert Murdoch could not foresee five years ahead when buying the “fastest growing property” for the laughable $580 million.
Although admittedly not dissimilar to that of the dot-com boom, the current atmosphere has also a lot in common with euphoria that follows any technogenic breakthrough- from steam engine to transistor. Modern Social Media have fundamentally changed not just the way we communicate but rather the way we live. Both Hotmail and PayPal were born in the age when everything seemed possible; and it still does; and it still is. The history of companies born in flames of revolutions proves that good ideas are worth pursuing.