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A lot of media attention has been paid to the so called “bursting” of social media’s bubble in recent months. Fueled by the mounting losses one-time investment darlings Groupon, Facebook and Zynga have amassed, there’s been a rush to proclaim this as another “dotcom”-like bust.
However, this assertion seems shortsighted, particularly in light of what we learned from the dotcom crash at the turn of the century. Simply put, while internet companies came and went in 2001, the internet itself did not go away. Instead, it only grew and became a far more essential part of everyday life, business and our world. Today, the web is the underlying backbone through which nearly everything passes.
Social media and its resulting spinoff gaming and sales platforms are just a few of the long term evolutions resulting from what began at the turn of the century. Of course, this doesn’t mean that the above noted businesses aren’t going to struggle mightily or even disappear, as there are already reports of restless employees at the wounded superpowers. Yet, while the names (and apps) may change, all one has to do is walk by a bus stop, go to a concert or turn on a computer to see that the medium isn’t going anywhere.
So what is going to happen? New companies will emerge, learning from struggles these companies are experiencing as well from the success companies (such as LinkedIn) have enjoyed. A roadmap will be created for the next iteration of the medium.
For example, social media is making serious progress within the enterprise arena and being touted by some as the new “frontline” of customer service. A study published in July by the McKinsey Global Institute suggested that “the most powerful applications of social technologies in the global economy are largely untapped,” and stated that “twice as much potential value lies in using social tools to enhance communications, knowledge sharing, and collaboration within and across enterprises.” The study concluded that “by fully implementing social technologies, companies have an opportunity to raise the productivity of interaction workers—high-skill knowledge workers, including managers and professionals—by 20 to 25 percent.” You can read Pierponter Brad Russell’s insights on increasing employee productivity with social technologies here.
So while social media’s bubble may have burst, as history has shown, this down period won’t last long and doesn’t really matter for the long term viability of the medium. Booms usually leave more discarded companies in their wake than they do thriving survivors. The companies that emerge will be the ones who truly shape the social media landscape of the future the same way Google shaped search and Amazon pioneered online sales.
For those of us in the marketing and public relations professions, the important lesson here is to ignore the chatter about social media’s bubble. Even if the bubble did burst, it doesn’t matter for the reasons stated above. More importantly, and unlike in 2000 when less than 50 million people used the web, the medium is now a vital form of communication for many which we must continue to use to engage our target audiences. This is not going to change anytime soon.
What are your thoughts on the social media bubble? Is it here to stay or just another fad? Share them below.