Thought of the Day, Jan 18, 2009
Michael Fitzgerald in Technology Review, asks the question “Are social networks sinking?” — an interesting question, to which the answer is simply “No.”
To paraphrase Oscar Wilde, the death of social networks is greatly exaggerated.
A couple of points from the article are overly pessimistic, or put a negative spin on what would be seen as normal consolidation in an emerging market.
For example, the acquisition of Pownce and Twitter’s acquisitions indicate that the microblog industry is coalescing and maturing, not dying. Likewise, Google’s January 14 announcement that they are shifting their position on Jaiku (releasing the open source “Jaiku Engine”) suggests that the company is retrenching and evaluating its options, not abandoning social media altogether.
As for revenue, some pundits argued that Facebook would never have a revenue model. So it is surely too early to say that Twitter never will.
There is much going on in social media and Web 2.0 that is new and experimental—to characterize it as a bubble (alluding to a similarity with the housing bubble) is, to my mind, just plain wrong. Look at the Internet just after 9-11. A lot of big name Web sites went under, but was it the end of the Internet? I would argue social media is in the same position today. To say it is sinking is indeed exaggerating.
Indeed, the second page of the article cites an industry observer who believes that “the current shakeout” will “burst with a pop,” rather than the “thunderclap” of the dotcom bust.
Yes, there is much that needs to be fixed, clarified, and worked out. Valuations may be way off, but that does not negate the potential of social media as a marketing tool.
Yes, there will be consolidation. I have argued this is not only likely but necessary in my blog almost a year ago (April 21, 2008: The future of social networking: Consolidation or fragmentation?). It is a needed and inevitable part of an industry’s growth process, not its death knell. Look at any mature industry today, and you will see that they all go through a period of explosive growth, experimentation and consolidation.
This fits with a model articulated by Jeanne Powell and Francisco Moris at the Economic Assessment Office, Advanced Technology Program (NISTIR 6917 Different Timelines for Different Technologies, 2003). My take is that social media is moving from the “Fluid, Emerging Phase” to the “Transitional, Growth Phase”
What is key to success in this evolving environment is to stay flexible, up-to-date with technologies and not to put all our eggs in one basket.
Social media strategists will be wise to incorporate this philosophy into their social media planning.