Thursday, June 7, 2012

Social Media – Where Do We Go From Here?


Just when things look like they couldn’t get any worse for Facebook; a new survey was recently released indicating that 34% of Facebook users are spending less time on Facebook than six months ago. On top of that, nearly 50% of the respondents spent around the same amount of time on Facebook. Why the lack of interest? Maybe it has something to do with perceived user value? It’s a pretty simple concept really: if somebody finds more value in A than B, they will demand more of A. Looking at my own daily experiences, Facebook competes for my other offline and online time reading news sites, blogs, websites, etc. In short, the more value I find being on Facebook, the more of my time it will demand…and lately that too has been in question. Just how many narcissistic posts about where somebody currently is or what they just ate for breakfast can get a little, shall we say; boring.

Google +’s  “me too” Answer To Facebook

As I have noted in previous posts about Google +, Google + is like they guy who shows up at a party at 2 am in the morning and yells “let’s get this party started!” Even former Google engineers have referred to Google + as a “pathetic afterthought” and make it out to be symptomatic of Google losing its way. Since Larry Page took the reins at Google last year, it seems like everything they do these days hinges on the success of Google +.  To wit: just this week Google announced the movement from Google Places to Google + Local. Why the change? Why else – Google wants more Google + members and seemingly everything else they have tried up to this point to generate more Google + users have failed in comparison to Facebook. So when all else fails – try and coerce again.

Google + Local to Drive Google + Membership

Now that business owners are once again confused by changes to formerly Google Local, then Places and now Google + Local, they will continue to try to understand, claim, optimize and generate client reviews for their local listings. The catch? Only people with a Google + account can leave reviews. But this all didn’t start here. A few months back, Google found yet another way to generate Google + users by adding thumbnails adjacent to the certain listings on the Google results pages. How do you do this? Easy, you need a Google + profile and then you can follow these instructions. Wayla! More confusion for regular business owners and more Google + accounts as a prerequisite to play.

Facebook’s IPO Problem

Most good technology investments have a financial business model in place to generate revenues – which is what attracts good investors. When Facebook priced its IPO at 100X earnings compared to Google who is selling at 11 (and controls 82% of the search market and 98% of the mobile search market), one has little to scratch one’s head over when Facebook loses 30% of its value in the first few weeks. Facebook has a valuation problem based on revenue growth and anybody who watched the movie Social Network should understand that this problem was clearly in sight for all to see long before the IPO ever took place. All these people that ponied up millions of dollars over the years to Facebook were expected a big return on their investment and thanks to Morgan Stanley, all glory is fleeting.

Where Do We Go From Here

 Social Media could very well be at a crossroads. On one hand, you have Google who seems to want to cannibalize any and all of their services to support a system, Google +, that nobody outside of Google really wants to use. On the other hand, you have Facebook that has 900 million users, 34% of which indicate that they are losing interest and a company that now has to somehow generate a boat load of revenues to keep the dream alive and their investors happy and not jumping for the shore once the IPO shareholders sell window opens up. Now that’s a pretty tall task for any 28 year old whose whole business model is built around the promise that Facebook is “free and always will be.” Perhaps Mark should have learned from Google whose motto “don’t be evil” has led to the senseless hatred of panda’s and penguins everywhere.

As for the rest of us, new innovation fostered by freedom of thought and need will clearly help steer our appetite for better and more useful innovation in the months and years ahead. Where will all this come from? Who knows! But is it very likely where we know it will not come from. As Henry Ford was fond of saying “A market is never saturated with a good product, but it is very quickly saturated with a bad one.”

13 comments:

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