In this week’s Thursday Night Insight, Nick Hague assesses how valuable social networking really is today.
In the last week I have been bitten by a vampire, had a sheep thrown at me and been poked by numerous people I don’t even know!
No, I am not talking about the strange life of a researcher; I am talking about the wonderful life of social networking on Facebook. Under the duress of other friends linking up with old school acquaintances and not wanting to miss out on this new phenomenon I joined Facebook two years ago. Since the very early frenetic activity of trying to get as many friends as possible, my account has laid dormant for a good 18 months after my circle of friends reached saturation point (note the term friends I use loosely as I have over 100 friends but the majority are more distant connections that I have never really known).
Facebook and social networking have grown dramatically over the past few years from Friends Reunited through to Myspace, Bebo and now Twitter. However, my question for this week’s Thursday Night Insight is how valuable is social networking and with the number of people who visit Facebook leveling off over the past few months in the USA, are we facing Facebook fatigue?
When something is growing, everyone feels like they are part of something valuable but what about when the growth stops? Are people losing sight of the importance of what value social networking delivers as opposed to focusing more on the dramatic growth it has experienced and valuing it at astronomical amounts (On October 24, 2007 Microsoft announced that it had purchased a 1.6% share of Facebook for $240 million, giving Facebook a total implied value of around $15 billion).
I believe that, similar to what happened in the 1990s with the dot com bubble bursting, the market valuation of some social networking sites has been blinded by myopia of the thought that growth is directly related to value when actually the whole concept is "built on sand" and without any real substance the market value is actually a lot less.
If Facebook doesn’t figure out what the real value is that it creates and figures out a way to capture it, they may be at great risk of collapse over the next few years. Maybe they can take a leaf out of Linkedin’s book?
I have been a member of Linkedin for over a year and although I haven’t used it that much I can definitely see longevity in the notion of business networking as opposed to social networking. One recent development of Linkedin is the creation of a research network that enables over 28 million b2b professionals (15 million within the US and 13 million across the world) to be targeted worldwide. Once the luxury of consumer marketers, now b2b research can be utilized effectively online across difficult to reach industries, geographies and job functions. Another advantage of Linkedin we have found at B2B International is that people have a vested interested in keeping their details up to date. This allows us as researchers to actively source named contacts that were previously inaccessible before from within large corporations because we couldn’t get past the receptionist who polices the front desk with a no name policy.
It is clear that "panels" of one kind or another are the future of research and online networking will help deliver that benefit to research companies. However, will Twitter, Facebook and other such sites continue to evolve? If not, they could well go the way of Bernie Madoff’s Ponzie Scheme over the next few years.
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