FreePint
 Supporting the value of information in your enterprise

FreePint BlogSocial media 1: Who knows how to pick winners?

Friday, 15th July 2011 Please login top-right to be able to star items

By Tim Buckley Owen

Item:

Amid the firestorm currently engulfing News Corporation, it would be easy to lose sight of another recent setback for the media conglomerate: its sale of the social networking site MySpace for a mere $35 million, having spent a whopping $580 million to buy it in 2005. It may be small beer compared with the trouble the company is now in – but it is a vivid reflection of the continuing difficulty business of every kind is encountering in getting to grips with social media.

Widely reported (try the BBC for example), MySpace seems to be only one symptom of a malaise affecting wide swathes of the investment community where social networking is concerned. Among a crop of apparently mispriced recent initial public offering valuations by investment banks, the Financial Times’s Vince Heaney highlights LinkedIn, noting contrary arguments that it was either underpriced because the value of its shares shot up on the first day of trading, or is actually overpriced longer term because a bubble is developing in social networking stocks.

A survey by United States accounting and consulting organisation BDO-US (reported by the CNET news network) also finds over 60% of capital markets executives at investment banks believe social media companies’ valuations can’t be justified and that a second dot.com bubble is at least likely. But BDO partner Jay Duke isn’t convinced – because today’s internet companies are at least real, with solid business models.

Nevertheless, Facebook’s valuation in advance of a possible IPO has undeniably been ballooning – even though the newsletter Inside Facebook reports that user numbers have actually been dropping in early adopter countries such as the United States, Canada and the United Kingdom. Once penetration reaches around 50% of a country’s population, it seems, usage tails off.

Twitter use, on the other hand, continues to grow dramatically (admittedly from a much lower base), according to the latest findings from the Pew Internet & American Life Project. Use by 25-34 year olds has doubled since late 2010 (from 9% to 19%) and that by 35-44 year olds has grown from 8% to 14%, with particularly heavy use among African Americans and Latinos.

Then you need to add to all this the arrival of Google+ – albeit just as a “project” for the moment. Its basic premise is that current online sharing is “awkward – even broken”, because “the subtlety and substance of real-world interactions are lost in the rigidness of our online tools”. So it could turn out to be a major disruptor.

But all this is simply context. What really matters to business is making viable use of social media – and all the signs are that it’s still thrashing round without much of a clue how. More on this shortly.


 

About this item:



Tim is an information skills trainer and writer on the information industry with over 40 years' experience in the profession. His career has encompassed information management, writing, editing, training, government policy advice and corporate media & marketing.

Besides writing for FreePint, Tim runs courses for training providers and private clients on enquiry handling, abstracting & summarising, information packaging & presentation and information management. The sixth edition of his classic handbook Successful Enquiry Answering Every Time is published by Facet Publishing. You can find details of Tim's training services at www.buckleyowen.com.

Tim can also be reached at tim.buckleyowen@freepint.com

More articles by Tim Buckley Owen »


« See all FreePint Blog items







FreePint Topics
Sources: Staying informed and aware
Sources
Technology: Improving information work with technology
Technology
Value: Maximising value for information work and investment
Value
 
FreePint Newsletter

Keep up-to-date with the latest FreePint articles and tips by email twice a month.

Email address:


Newsletter 397
24th April 2014

FreePint NewsletterWe highlight details of our latest product reviews, webinars & consulting projects. Get involved with our Communities of Practice or consulting projects.


Register free »
Newsletter archive »

Have a FreePint Subscription?

"Yes, we subscribe"

Login to MyFreePint to access purchased content, be able to 'star' items, and to share items with your colleagues.


"No, not yet"

Find out more about the benefits of accessing all our premium articles, reports, webinars, communities of practice and consulting, through a FreePint Subscription

Keep up-to-date by signing up for the FreePint Newsletter.


"Don't know"

Contact us and we'll check if someone in your organisation has already purchased a subscription.


FreePint Subscription

A FreePint Subscription gives access to all FreePint content (articles, reports and webinars), Communities of Practice and consulting. Find out more.