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When/will the Social Media Bubble Pop?


Grimes

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I'm doing a Finance assignment on it and I was wondering if you guys had any opinions on it. Personally I think that companies like Facebook are making all these insane purchases (Eg; WhatsApp for $16billion) Just to keep their name in the lime-light and keep people investing.

 

Thoughts?

 

 

 

Edit: Just realised this is probably the wrong section but w/e.

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i dont know, it has really changed the world and all, i think the general idea is here to stay but the companies might change

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Can you explain the question a bit more?

 

I don't really get what your question is.

 

Will social media companies implode when investors stop investing in them? Will investors stop investing at all? 

 

Edit: Basically its about consumer confidence. Once these companies falter, people loose confidence in them. Can you see this happening?

Edit #2: A further question could be: Is it worth investing in them right now?

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AIM really started the first trend back when texting was still expensive. Now smartphones are still dominating the market, inventing "the next best thing".

I think companies need to start realizing that innovation is what keeps them in the game and you can't rely on your past success to propel you forward. (Blackberry's history is a prime example)

 

It's why social media sites like MySpace failed, it wasn't different enough and people got tired of it. When people start losing intrest in your site, based on SOCIAL media it goes downhill.

 

Edit: just saw your post, in my opinion; yes, yes, yes and yes. Is it worth investing in them, there's better money somewhere else. (And more stable money)

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My understanding of Social Media worth is that they are valued by the number of active users they have. From that point, they use those numbers to demand more from companies who wish to advertise their product via social media. I view their current lavish purchases as a means to secure a foothold so that they are still profitable when people start using their services less and less. Investing in them is most likely not worth it as they will most likely decline in worth as time goes on. 

 

In a TF2 analogy: Social Media is the Disco Beat Down of the investing world. It is new and still trying to live off the original hype to some success. 

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So many companies buying other companies. Pretty soon it will just be about 8 major monopolies.

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Will social media companies implode when investors stop investing in them? Will investors stop investing at all? 

 

Edit: Basically its about consumer confidence. Once these companies falter, people loose confidence in them. Can you see this happening?

Edit #2: A further question could be: Is it worth investing in them right now?

Question #1

I wouldn't really see investors retracting, unless a more promising (creative) company comes into play. 

 

Just check Friendster and MySpace. They were buried under Facebooks might. Thats because Facebook was new, it was creative, it was different. It had things that the previous social powerhouses didn't even have.

 

Friendster and MySpace tried to get back in the game, but with the investors eyes on Facebook. It was inevitable that they will fall.

 

Question #2

Like I said above, they will fall if a new, much greater and powerful king plays the game, but if it never happens.

 

Welp, it's unlikely since Facebook is pretty much the only big social media. Yes, theres Twitter, Instagram, Vines etc., but money-wise Facebook is a monopoly . They'll do anything to neutralise any underdog in the game, with money ofc. What the fuck else do they have than money and every company loves money.

 

Question #3

Investing is always a risk, but in the current state of Facebook. I would say it's still worth it. 

 

 

This is just my opinion. Please don't rustle my jimmies.

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Question #1

I wouldn't really see investors retracting, unless a more promising (creative) company comes into play. 

 

Just check Friendster and MySpace. They were buried under Facebooks might. Thats because Facebook was new, it was creative, it was different. It had things that the previous social powerhouses didn't even have.

 

Friendster and MySpace tried to get back in the game, but with the investors eyes on Facebook. It was inevitable that they will fall.

 

Question #2

Like I said above, they will fall if a new, much greater and powerful king plays the game, but if it never happens.

 

Welp, it's unlikely since Facebook is pretty much the only big social media. Yes, theres Twitter, Instagram, Vines etc., but money-wise Facebook is a monopoly . They'll do anything to neutralise any underdog in the game, with money ofc. What the fuck else do they have than money and every company loves money.

 

Question #3

Investing is always a risk, but in the current state of Facebook. I would say it's still worth it. 

 

 

This is just my opinion. Please don't rustle my jimmies.

 

So, too big to fail?

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-snipped for space-

 

And because it is your opinion, I am allowed to interject :P

 

1. Facebook succeeded not because it was new, but because it was originally exclusive. People flock to that which they are not allowed to attain. It wasn't really different. It did have a few aspects that did set it aside from other social media networks, but it was essentially a glorified Myspace to begin with.

 

2. Facebook showed up at the right time. Nothing is ever too big to fail. Sprint would have been leading in phone internet service if they did not make several financial mistakes. And look at the automotive industry crisis that happened a few years back. They would have completely burned if there was no intervention. Hell, nothing is too big to fail. I thought that would be obvious after the Great Depression.

 

3. I will agree with you here. Facebook is a relatively safe short-term investment.

 

Bonus Points for #2: THQ.

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I'd honestly see it crash in ~5-7 years max.

Wouldn't be surprised. Bouncing off the walls here and there.

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Wouldn't be surprised. Bouncing off the walls here and there.

 

I could see it happening with a new company surpassing Facebook and crashing because of bad business choices, or just Facebook making bad business choices.

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I think Facebook for one is actually gonna survive pretty well considering how integrated it is in so many services now, and it's still expanding after quite a while. 

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I think Facebook for one is actually gonna survive pretty well considering how integrated it is in so many services now, and it's still expanding after quite a while. 

 

They will definitely last the longest, but I see Facebook itself withering and dying while their sub-companies do all the real profiteering in several years time. Facebook will cease to be a Social Media Network and more of a brand name for what said companies produce.

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I think Facebook for one is actually gonna survive pretty well considering how integrated it is in so many services now, and it's still expanding after quite a while. 

They'll last for the meanwhile, and then it'll be Myspace all over again.

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And because it is your opinion, I am allowed to interject :P

 

1. Facebook succeeded not because it was new, but because it was originally exclusive. People flock to that which they are not allowed to attain. It wasn't really different. It did have a few aspects that did set it aside from other social media networks, but it was essentially a glorified Myspace to begin with.

 

2. Facebook showed up at the right time. Nothing is ever too big to fail. Sprint would have been leading in phone internet service if they did not make several financial mistakes. And look at the automotive industry crisis that happened a few years back. They would have completely burned if there was no intervention. Hell, nothing is too big to fail. I thought that would be obvious after the Great Depression.

 

3. I will agree with you here. Facebook is a relatively safe short-term investment.

 

Bonus Points for #2: THQ.

You rustled my jimmies :(

jk

 

1. How was it exclusive? It was made to be a university website and it expanded to let companies use it for business. People found it and made it a Social Website. Facebook had Friends, Wall, Groups, Apps, Games, Videos, Live chat, Messaging, Status and you can upload photos, videos with no ease for sharing.

 

2. Facebook is a monopoly. It's going to take a real long time before it falls.

 

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You rustled my jimmies :(

jk

 

1. How was it exclusive? It was made to be a university website and it expanded to let companies use it for business. People found it and made it a Social Website. Facebook had Friends, Wall, Groups, Apps, Games, Videos, Live chat, Messaging, Status and you can upload photos, videos with no ease for sharing.

 

2. Facebook is a monopoly. It's going to take a real long time before it falls.

 

 

 

1. WAS exclusive. First only Harvard Students could use it. It was then expanded to a few other schools. Facebook started in 2004, but was not available for everyone to sign-up and use until Fall 2006. By that time, the name was well recognized and it was the exclusivity that made people want to get in on it. It was the semblance that those who had a Facebook account while it was still a private place were part of some hierarchy.

 

2. Facebook is close to a monopoly. They do not own the entire social networking sphere no matter how much it looks like they do. There is always Twitter, Instagram, etc. etc..

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1. WAS exclusive. First only Harvard Students could use it. It was then expanded to a few other schools. Facebook started in 2004, but was not available for everyone to sign-up and use until Fall 2006. By that time, the name was well recognized and it was the exclusivity that made people want to get in on it. It was the semblance that those who had a Facebook account while it was still a private place were part of some hierarchy.

 

2. Facebook is close to a monopoly. They do not own the entire social networking sphere no matter how much it looks like they do. There is always Twitter, Instagram, etc. etc..

1. I get your point about the exclusiveness, but people stay on website because of the content. Not because it was forbidden a few years from the public. MySpace was more for entertainment (Like youtube in a way).  Facebook was more for socialising and sharing interest, which people always do.

 

2. Twitter and Instagram has nothing compared to Facebook. Facebook is pretty much the god of social networks and is untouchable, but your right only close to a monopoly.

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1. I get your point about the exclusiveness, but people stay on website because of the content. Not because it was forbidden a few years from the public. MySpace was more for entertainment (Like youtube in a way).  Facebook was more for socialising and sharing interest, which people always do.

 

People stay with those they wish to stay with. Take these forums for example. If you did not like and connect with most of the people here, would you even consider coming back? Facebook kind of ensnared everyone at the right time. There is no better alternative, and since no one is willing to leave in mass chunks, it will still remain the way it is. And I have to disagree with you on the "people stay on website because of the content." People go to a website for the content. They stay for the community.

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It will be stable. Kids today can already use an Ipad and can easily make a Facebook account. Not to mention that, when the current generation of teens get kids, their kids will most likely be bombed with Facebook, and every picture of them are going on Facebook(atleast by all the attention whores). The only way it crashes is if something new and better comes, wich probably will, but still, very long time till that.

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It will be stable. Kids today can already use an Ipad and can easily make a Facebook account.

I think you have to be a certain age.

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