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Is The Social Media Bubble About To Burst?

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Social Media BubbleThe social media bubble has a lot of attention these days.  The prognosticators of tech have their eyes trained on the changes of social media today and if you’re old enough to remember the old days of the dotcom boom, you’re also old enough to remember the fantastic rollercoaster ride that preceded its own implosion. Back in those heady days, companies like Epidemic.com, E-Stamp.com, and Ourbeginning.com were spending millions of dollars they didn’t have on Super Bowl ads — only to disappear and never be heard from again. Is the same thing about to happen in social media? Could Facebook be tomorrow’s MySpace? Signs point to yes.

The Social Media Bubble Saturation Point

First, let’s take a look at the numbers. In the third quarter of 2013, social media companies received a mere two percent of all venture capital for Internet-based enterprises . While that represents a respectable amount of pocket change, consider that just two years earlier in the third quarter of 2011, that percentage was 21. This doesn’t so much point to a social media bubble burst as it does a slow deflation — which, in the end, could be just as messy of a fall.

Fatigue Factor Nigh

And then there’s the whole fatigue factor. The human element involved in social media is far more unpredictable and shaky than any terrifying stock market scenario. Just a few years ago, all the kids were crazy about MySpace. Then an upstart named Zuckerberg came along with his new invention and took the world by storm — but by all signs, the kids today aren’t as crazy about Facebook as the older folks are. And that’s what is commonly known, in distinctly non-scientific lingo, as “a bad sign.”

The Kids Aren’t Alright

According to a Time.com article from January, teens are at the forefront of a mass exodus from Facebook. This is information that even Facebook conceded when CFO David Ebersman said, “We did see a decrease in teenage daily users, especially younger teens.” Since 2011, over 11 million youths have shut down their Facebook accounts. Nearly 4.3 million of those are high schoolers, with some 6.9 million college-aged students following in suit. Blame it on the fickleness of youth. Or blame it on the old folks for taking over social media and cramping the younger generation’s style. Wherever you lay blame, one thing is absolutely certain: today’s youth — who are tomorrow’s defining culture, for better or for worse — are over it. And they have their sights set on the next big thing.

Investment Ebook

Some have found their way to more instant gratification-oriented sites like Instagram, where a single 200 DPI snapshot can convey a thousand words in a fraction of the time it might take to read an entire blog post. But even those alternative social media outlets are standing on wobbly legs and the younger generation are retreating en masse to more personalized methods of communication, like texting.

Looking Back on the Future

In another ten or 15 years, when we all look back on the social media craze of the early 21 st century, we’ll be able to sum up the reason for its demise in one word: advertising. These days, you can’t watch a 15-second YouTube clip without having to suffer through a 30-second car insurance ad first. Facebookers getting online to seek out their favorite brand’s latest moves are being thwarted at every turn by algorithms that pick and choose what’s displayed on their news feeds based on a constantly changing set of variables. Ultimately, it’s the desire for social media companies to achieve maximum monetization for their platforms that will be their downfall and reason for the social media bubble burst.

If you’re looking for signs that the social media bubble is an investment still worth making, or reassurance that you’ll still be able to “Poke” old high school flames you haven’t seen in 20 years without the repercussions of true life embarrassment, keep looking. Just don’t say we didn’t warn you.