Social media sites currently rule the roost - or at least the cyber world. Practically everyone I know with net access has a Facebook, MySpace or Twitter account. And yet, with all of this buzz, could social media sites be heading for a bubble burst akin to the 2001 dot com crash?
In a recent article in Media Life, Paul Benjou makes a compelling case for just such a crash. It may be hard to believe, for many infatuated with social media, but it's not easy to ignore the signs.
Four years ago, Rupert Murdoch paid $580 million for MySpace. Recently top execs and 700 workers of MySpace were laid off. In February 2004, Mark Zuckerberg launched Facebook. Today the site has over 200 million users but no business model whatsoever.
Benjou draws parallels to the telephone when talking of advertising on social media. 100 years after the telephone first rang on the communication scape, users still do not accept advertising. Anger over marketing calls prompted the "Do-not-call" registry. Social media is the same and Benjou argues advertising will always be considered an intrusion in social networks.
So without advertising and with users accustomed to an "always-free" model, where's the money to come from? And more importantly, what about users who are simply fed up with all that networking?
Reflecting user fatigue Susan Coils comments on a post by Charles Heflin:
Personally, I agree with Tonie - it’s all becoming a bit boring now. Is anyone actually still bothering to sign up to the latest, greatest, social networking sites?
Matt Hames at Share Marketing gives a different twist:
Clients have come to the conclusion that they have a Facebook page, or a Twitter feed (or something). Think about it: they don’t want a Facebook page to enhance their overall marketing. They simply want a Facebook. page. The prime ingredient for a bubble is the desire to do something because everyone else is doing it.
So if the businesses and individual users do drop out of social media, what's let for SM companies?
Hmm... smells like 2001.
What's your take?
