Is this the end of social networks?

Publicado: julio 11, 2013 en Economia, Empresa, Entrepreneurship, Innovación, Tecnología
Etiquetas:, , , , , , , ,

Over the last ten years, the phenomenon of social networking has become part of the everyday life for millions and millions of people around the world. What started as a crazy but simple idea, it has become a window to innumerable world of possibilities to generate business. The virality of the tool and the ability to reach millions of users in just one click has made social networks a very interesting mean for companies to advertise themselves.

As any other boom, social networks quickly seemed to have an endless potential; and even though nobody was certain that they would end up being as prolific as generally predicted, there was no doubt about its possibilities. Therefore, and realizing about such a big business opportunity, competitors quickly got into it trying to get the biggest piece of the pie. Conclusion: the final result was no other than the proliferation of social network… but in many cases, without a clear business model.

For instance, in 2012 Facebook’s turnover accounted for more than 5,000 million dollars, 80% of it due to advertising. It is unquestionable that to bill that amount of money for such a young company is more than a success, but this does not ensure its bright future. Facebook’s example has not been chosen by chance, because in my opinion, the most popular social network is the one which has to be more renewed in order to remain leading the market. Actually, I believe that their business model depends on the easiest variable to be equaled by the competition, the volume of users.

Comparatively, other “big” social networks such as Google, Twitter and Linkedin offer a differentiated value to their potential stakeholders interested in investing / buying the services they provide through the intensive use of information. By order and synthesizing, using the power of its search engine, Google allows companies to perfectly categorize the target they want to reach; Twitter apart from creating real-time information, it also generates / disseminates trends, meanwhile Linkedin, more focused on a very specific market, segment its users in order to give really valuable information for recruiting companies.

Redes sociales

I am not saying that social networks are about to die. In fact, I still believe in their potential and I refuse to think that something which can mobilize so many users should not be able to reinvent itself in order to generate even more revenue than nowadays.

Nevertheless, having the advantage of being the first mover won’t be enough to keep on leading the market. In this case, as in many others, reinvention will become essential even more when talking about revenues from advertising. From my point of view, the key for the future will be to have the ability to generate and manage information that someone is willing to buy.

DVM

comentarios
  1. knowthing dice:

    Do you think that social networks have a sustainable revenue model? Are there too many of them? Do you believe in their economic viability?

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