The health of the social media scene
With the rest of the economy seemingly disintegrating before our eyes at a rate few would have conceived of this time last year, it’s no wonder that danger signs are appearing online and even in social media.
There are two camps of people: those who believe that the recession will not touch online business – or maybe even boost it; and those who believe that the same economic storm will lay waste to online business just as ferociously as it’s already doing offline.
Both camps can call on different stories to support their views: online sales were up over Christmas, showing that people are moving online to buy things and that’s why high street retailers like Woolworths are going out of business; but the growth rate was dramatically down on previous years, and there were casualties online too: online electrical goods trader Empire Direct went bust in January seems to show that the medium (online/offline) makes no difference if a sector such as retailing is chronically depressed.
You can argue this week’s story of Twitter raising $20m more funding either way: that it shows that there is money out there to support good businesses despite the credit crunch; or else it shows that even the “hottest”, fastest growing, most publicised online service of recent months is struggling even to scrape together a pitifully small smount to stop it from going out of business. (How they wish they’d taken that Facebook buy-out offer now, huh?)
The latest rumour is that it appears AOL, once the biggest player in the online sphere, seems set to dump the youth-orientated Bebo social media network. This is one of the biggest social media networks around – not of the order of MySpace, let alone Facebook, but still an important player and seemingly very successful in appealing to advertisers who want to target the youth market. But with advertising drying up on all fronts it seems AOL need out of the deal, which cost them $850m in cash less than one year ago in one of the few Web 2.0 acquisitions we’ve seen thus far, and which now – if reports are to be believed – will be lucky to scrap a quarter of that ($200m) in 2009.
You could argue – with justification – that this is more a reflection on AOL’s precipitous fall from grace (remember when it was big enough to buy Time-Warner? Feels like a completely different epoch, doesn’t it?) and you’d be right. But it also bodes badly for any Web 2.0 business starved of advertising revenue looking to any angel company for a buy-out and a big (or even modest) payday.
So if you can’t get loans without a high price, and you can’t get bought out (unless it’s a deal like Movable Type owner Six Apart made to buy up faltering micro-blogging company Pownce to immediately shut it down as it did late last year) then things can’t be good out there. One by one we could well see the social media landmarks falter and possibly fall. And then all those nice toys we get to play with – from WordPress to Twitter, Flickr (whose owner Yahoo! just posted a $303m loss for the last quarter of 2008 ) to Wikipedia (only recently saved by a massive fund-raising drive), from Bebo to MySpace and even Facebook – will disappear without a trace.
Maybe this will be a case of Schumpeter’s “creative destruction” and leave the ground clear for a thousand new businesses to bloom post-recession. Or maybe it will just leave a barran wasteland and a generation of entrepreneurs too scared to try anything. Either way, we need to be sure that we’re not complacent about the challenges and difficulties we all face – online as well as off – in 2009 and beyond.
More from meHere's links to other things that I'm doing: my tweets, my reviews blog (Taking The Short View), my motor sports blog (motorsports.ind), my Google Shared items. Please check them out if any of them sound like your sort of thing!
See the latest stories I've been writing for crash.net on GP2, IndyCar and NASCAR.
- Taking The Short View hacks into Mr Robot S1 takingtheshortview.wordpress.com/2017/04/27/mr-… 1 day ago
- Taking The Short View meets Colonel March of Scotland Yard takingtheshortview.wordpress.com/2017/04/26/col… 2 days ago
- Second barrage of hail. Some mean looking chunks of ice in this lot, too! 2 days ago
- Sudden hailstorm in #Surbiton. I though tit was rather cold today... 2 days ago
- Taking The Short View reads Noah Hawley's "Before The Fall" takingtheshortview.wordpress.com/2017/04/25/bef… 3 days ago
- Taking The Short View revisits James Burke's 1978 classic science history series "Connections" takingtheshortview.wordpress.com/2017/04/24/con… 4 days ago
- Possibly the most in-sync we've ever been on an episode of #doctorwho! twitter.com/frameratedUK/s… 5 days ago
- Taking The Short View keeps on smiling with Doctor Who S10 E2 takingtheshortview.wordpress.com/2017/04/23/doc… https://t.co/2HmcrtqQPc 5 days ago
- #Hinterland really is a most excellent drama. And tonight's possibly one of the best yet. 1 week ago
- Literally an example of turkeys being happy to vote for Christmas. twitter.com/SkyNewsBreak/s… 1 week ago
- Mr Robot S1 (2015) (Amazon Prime/DVD) April 27, 2017
- Colonel March of Scotland Yard (1954-1956) April 26, 2017
- Before the Fall, by Noah Hawley April 25, 2017
- Connections (BBC One) (1978) April 24, 2017
- Doctor Who S10E2 “Smile” (BBC One) April 23, 2017
- Doctor Who S10 E1 “The Pilot” (BBC One) April 16, 2017
- Oasis E1 “Pilot” (Amazon Prime), and The Book of Strange New Things by Michel Faber April 12, 2017
- Sneaky Pete S1 (Amazon Prime) April 5, 2017
- Top Gear S24 E1-4 (BBC 2) March 30, 2017
- Watching the detectives: Line of Duty; Follow the Money; The Team; Broadchurch; Vera March 29, 2017
- An error has occurred; the feed is probably down. Try again later.
- Will the 2012 Bahrain GP take place? April 10, 2012
- A first look at the 2012 season form book March 17, 2012
- Sutil convicted over nightclub fracas January 31, 2012
- A slumbering blog December 8, 2011
- Future/Present: who will be the faces of tomorrow’s F1? July 30, 2011
- F1: Sky finally claim the Grand Prix July 29, 2011
- NASCAR: Loudon success rejuvenates Stewart-Haas July 18, 2011
- INDYCAR: Recriminations rage on after Toronto July 15, 2011
- Comment on Will the 2012 Bahrain GP take place? by Bahraini youth vow ‘three days of rage’ during Formula 1 « This Day – One Day April 13, 2012
- Comment on F1: Sky finally claim the Grand Prix by andrewlewin November 1, 2011
- Comment on F1: Sky finally claim the Grand Prix by Chris Williams November 1, 2011
My Flickr Photos
Most read posts
Archives by Month
Archives by Subject
- What to do about a problem like HMV?
- End of the road for HMV?
- Surbiton: Easter bridge replacement project 2012
- Keep Calm. But there’s no more carrying on
- And the word was good
- COI: letting go and saying farewell
- iSuccession: Steve Jobs’ final big achievement
- links for 2011-06-22
- Writing sense out of chaos
- Doctor Who – What, and Where Next?