Social Media Is Far From A Fad

by Team Caffeine · 0 comments

lori r taylor, revmediamarketing, social media, social media marketing, branding, product branding, networking, oneclicksocietyFad? Hardly

Believe it or not some folks are still calling social media a fad and predicting that any day now we will all wake up to what a time waster it is and go back to the real world.

As if…

Social media can hardly be considered a fad any more. There are a multitude of facts which point to it being a new way of life for all of us. Chief among these might be the sheer volume of people who use it. Nearly one billion unique users on Facebook and Twitter. The Initial Public Offerings of a few social media networks have helped restored a little luster to the stock markets and given investors reason to smile.

Trends That Last

There are also the trends which have been set, the new industries which have been created and the millions of people who have jobs today thanks only to social media.

Social media is not a fad, it is a new method for communicating between human beings. And it is not going away any time soon.

$100bn is a lot of money. It’s the latest price tag suggested for Facebook, which is expected to list on the US stock market at some point next year. Will investors be prepared to stump up this much? Many remain sceptical of the money-generating capabilities of social media firms such as Facebook, Twitter and LinkedIn and believe that valuations are frothy. To put it in perspective Amazon, a hugely successful internet firm, is valued at around $90bn.

There are two main reasons for the high expectations. Firstly, the immense user base. The increase in social media has been meteoric, largely due to the internet’s greatest strength – rapid and inexpensive sharing of information. If Facebook was a country, it would be the third largest in the world in terms of population. This is a critical mass of users that will take a monumental shift to reverse.

The second reason is scarcity. There are few stocks available in the space, and even fewer are available to retail investors, so those that are tend to fetch high prices. This in itself should be a red light. Paying a sky-high price for something in popular demand can often be a recipe for disappointment. However, the long-term rewards for the winners in this exciting area could be monumental if companies can capitalise on the opportunities through advertising.

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Team Caffeine

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