The advent of Myspace.com, and its early competitor Facebook.com, gave rise to the social media revolution. It seemed that everyone has jumped on the social media bandwagon, from start-up companies looking to develop their brands, to established companies looking to remain relevant. Though young technology users were the early adapters to the social revolution, eventually moms and grandfathers alike had a Facebook page. It seemed that the whole of the developed world would soon become connected through the likes of Facebook, Twitter, and Foursquare.
The spring of 2011 turned what the world knew about social media on its head. Once just thought to be a way to keep in touch with family, friends, and customers, the Arab Spring showed that social media was far more powerful than previously imagined. Protesters throughout the Arab world, protesting against dictatorial governments, lack of income opportunities, and other grievances used Facebook and Twitter extensively to organize. Efforts to block internet access, as best illustrated in Egypt, we futile.
It seemed that the redundancy of the internet was a reflection of the redundancy of real human connections in the real world. The regime of Hosni Mubarak was not able to stop the role that social media would play in his downfall. It could be argued that his insistence on blocking the internet was a catalyzing force for the opposition. The era of social media was here.
But, what is the future of social media? With more and more people connecting to the internet through mobile devices, such as smart phones and tablets, it seems that the internet itself is becoming more mobile. The continued popularization of social networks seems inevitable, but it is too soon to say exactly what this future will look like, and who will be the winners and losers. As can be seen from the Facebook IPO – the future of social media is bright, but the future of each individual social company is far from certain.
Facebook.com had one of the most highly anticipated IPOs in May of this year. It would be one of the largest Initial Public Offerings in years. More importantly, it would serve as the benchmark for the future of social media as a business. For years analysts had discussed potential profit avenues for the company, and social media in general. The outcome of the IPO has certainly made the future of social media, as it relates to big business, more cloudy. The company launched their IPO on May 18, 2012 – at an initial stock price of $38.00. The stock closed higher the first day – above $40.00. But, many analysts suspected Morgan Stanley, who handled the IPO for Facebook, of having purchased shares in order to avoid the embarrassment of the stock closing lower on the first day of trading. As of the writing of this blog the stock is trading between $22.75 and $23.00. Judging by this metric alone, the future of social media as big business seems shaky.
One challenge for social media companies is how to monetize their networks. What use is it have millions of subscribers, users, and followers if it is not possible to turn those stats into sales of some kind? Whether they be subscription sales, ad sales, or another kind of sale – social networks must find a way to turn visitors and users into profits. One reason for the slide in the Facebook stock price is that investors worry about how the company will handle the increasing conversion to mobile devices. Many people who accessed the internet primarily from a desktop just a few years ago are now using their mobile devices to access the web. Whether or not it will be possible to effectively deliver ads to mobile users through a social platform is still an open question.
One aspect of social media which shows promise, but has yet to really take off, is the mobile check-in. This social feature has best been popularized by Foursquare. It allows the user to check in at a particular location and essentially share their location with their network. Part of the problem with the technology is the application. Beyond occasionally sharing one’s location with their family and friends, it is hard to see exactly how this kind of technology will be used to help significantly contribute to the social movement. In a recent interview Dennis Crowley, co-founder of Foursquare, indicated that the technology is evolving. He says that there was initially some skepticism surrounding the services, but that people are coming around. The service boasts 25 million users, and has been able to develop an extensive map of local areas. In fact, there have been persistent rumors that the company is under consideration for a buyout by Apple. Apparently Apple needs the local maps that Foursquare has been able to develop through the check-ins on their mobile network.
The fact is that after the meteoric rise of Myspace, Facebook, and Twitter, there have been countless companies jumping into the social space – all with their individual idea and business model. Some, like Instagram, have been purchased by the existing social media players, and will continue to be integrated into the existing social models. With experts predicting that the social media revolution will continue unabated until social media is practically invisible and seamlessly interwoven into everyday life, some have raised the issue of privacy as one reason to beware of the social revolution.
Because companies like Facebook have to monetize their users, the company constantly has to balance between selling information to advertisers, and respecting user privacy. And, because the social network itself is a social media company’s largest asset – the companies must also continue to balance the information that it shares with users about other users. These kinds of concerns are all part of the tightrope that must be walked as social media enters the next phase.
Ultimately social media and social connections over the web will probably become second nature and truly part of everyday life. As early adapters age, and a younger generation comes onto the scene, the way people interact is bound to change. What seemed like sharing too much information to a previous generation may be wholly acceptable to the next. Whatever the future of social media, it seems that social connections over the web is here to stay. And, as the events of the Arab Spring demonstrate, expect the unexpected.
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