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Investors In Social Media Concerned Over Growth

 9:24 am on Apr 29, 2014 (gmt 0)

Certainly, as far as investors are concerned, it seems it's not the runaway success it was.

Has it plateaued from a user perspective. Has Facebook won the game?

I wonder if we'll see a change in the social media landscape with it losing its appeal.

Facebook Inc. (FB), Twitter Inc. (TWTR), LinkedIn Corp. (LNKD) and Yelp Inc. (YELP) fell today, marking at least four straight days of declines. All have lost at least 19 percent of their market value this year except Facebook, which is up 2.7 percent. That stands in contrast to last year, when each stock was up by a record.

Investors are questioning whether the Web companies can keep up revenue expansion, as some show signs of slowing gains in the number of users.Social Media May Have Started Its Decline [bloomberg.com]



 12:34 pm on Apr 29, 2014 (gmt 0)

When I first saw this article's title I expected a bit more than info about falling stock prices. I'm more interested in the user perspective rather than the investor side. The two aren't the same.


 1:35 pm on Apr 29, 2014 (gmt 0)

That's true, indeed, they are not directly linked. It's ironic but ad sales are growing so investors are a fickle bunch.

However, with sign-up rates reaching a less than steep rise, has the attractiveness of social media tailed off. Have sites such as twitter reached their limits?


 10:07 pm on Apr 29, 2014 (gmt 0)

Social media decline? Social media is the future. The young generation lives on social media. It's not going anywhere.


 10:16 pm on Apr 29, 2014 (gmt 0)

The young generation lives on social media.
I think that's part of the problem. Most of them have already joined social media to socialize with their friends, so there is a much smaller pool of new "customers" so it's not surprising sign-up rates are slowing. It's standard at some point after you reach critical mass.

Also, the younger generation tends to have a shorter attention span and get bored when the shiny object that attracted their attention doesn't seem so shiny any more. They move on to the next shiny object.

investors are a fickle bunch
I agree. A company's stock price is not so much an indicator of how well a company is doing, but how well investor's think a company is going to do in the future. And we all know how well those predictions go...

 10:41 pm on Apr 29, 2014 (gmt 0)

Never mind signups. What's happening with the number of active users?


 12:26 am on Apr 30, 2014 (gmt 0)

What's happening with the number of active users?

and, more specifically, what's happening with the level of activity? advertising success is dependent on visit length and engagement with the network.

on facebook, each of your likes will be counted as life-long endorsement for a company's brand and will be shown repeatedly as advertisement to all your friends effectively with you as testimonial. it's a slow process, but people do get more aware of privacy issues. authorities or potential employers having a look at you and making a social media profile. when you see such patterns, you'll start to reduce your involvement with the platform automatically at some point.

then, the product life cycle. people are used to that scarcely evolving website, which at most seems to only get worse in usability. apart from the familiar core functions, the nature of most newly introduced features is that hardly anyone uses or welcomes them. the whole thing gets boring and eventually people realize again the value of real offline relationships.

all that plus the slew of advertising, which gets annoying. as social media gets more and more commercial - a natural process, because investors want to squeeze money out of the network short-term - social interaction is gradually being reduced to a necessary minimum.


 4:57 pm on May 1, 2014 (gmt 0)

I certainly don't believe social media has declined. If anything, there's still more room for expansion.

I agree, it's a product lifecycle, and I wonder if we're seeing that, rather than social media decline.

When we all had the old analog TVs there was little choice for channels. We all watched what was there, or did something else. Now, in this digital world, there's a channel for just about any topic you can think of, and then some. The audience numbers declined considerably. What resulted was a much more defined audience.

Has that happened with the smaller social media services with their small, specialist groups.

Importantly, unless they are in a niche, are they are likely to get squashed, or forgotten.

Investors are after the next big thing that's going to make them money. They really don't care about the topic.

As you suggest, younger people, especially, are looking for the next social media shiny object and are happy to drop one and move on to the next.

Facebook's acquisitions have picked up the services that seem to be on-the-up, and I guess they will continue to do that to satisfy their users, and ultimately, the shareholders.

What about the smaller, specialist services. Is it best to "be acquired?"

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