Is the Social Media Bubble Imminent?

Is the Social Media Bubble Imminent?

0 Flares Twitter 0 Facebook 0 Reddit 0 Pin It Share 0 StumbleUpon 0 Email -- 0 Flares ×

CNBC is reporting (along with everyone else) on the social media bubble looming amidst massive IPO deals. The alleged bubble is not a new concept to the social media industry, with some strategists talking about potential warning signs as far back as 2008. But with major deals coming into play, that potential bubble is coming out of the woodwork.

pictured: the actual bubble

First off, Microsoft’s $8.5 billion purchase of Skype last week had critics buzzing, calling the giant figure inflated and off the mark. We’ll have to wait a while to see if the purchase was a bad move, but…$8.5 billion? Really??

Next, we’re seeing LinkedIn make its way to the NYSE with an IPO reaching $3.36 billion. This is over 10 times the revenue LinkedIn made in 2010…so where is the added value coming from? Likewise, Skype was valued at 12 times the amount of yearly sales.

If there is a bubble on the way, the biggest question falls on LinkedIn, Facebook, Groupon, and Twitter: what’s the real value?

Though out of these four media giants, Groupon seems to be the most easily toppled. It drives the worst kind of customers to businesses, has tons of knock-offs, and has been recently valued at a possible $15 billion. We’re not buying it.

So, if the social media bubble does burst…we’ll be over here where it’s safe.

About the Author

It’s Wall Street that creates the bubble and those who don’t fully understand the dynamics and behavioral usage behind the technology. Too much is gambled on “potential” as if technology users are easy targets who will roll over for anything that comes their way. Just like the dot-com bust, it wasn’t the technology that was the problem, it was the classic “Tortoise vs. Hare” match-up… the dot-com bust happened, the internet didn’t go away and people finally learned how to leverage eBusiness in a reasonable and evolutionary manner… the same holds true for social media. Let the big deals bust and blow up peoples faces, but for the rest of us, we’ll keep moving along at reasonable pace with reasonable expectations about what social media is… and what it isn’t.

Hey thanks for the link my friend!

there is a bubble but that bubble is on wall street not in the tech sector. CNBC is a cheerleader for the financial services industry and is looking to deflect attention from the fact that it is back to business on Wall Street again, having learned absolutely no lessons.

0 Flares Twitter 0 Facebook 0 Reddit 0 Pin It Share 0 StumbleUpon 0 Email -- 0 Flares ×