

Every few years we see the media grow big-eyed at the signs of a bubble–a housing bubble, an investor bubble, or in this case, a social media bubble. And this isn’t the first time a social media bubble has taken over the line, with tech eras seeming to come and go with every buzz word. Now that we’ve passed the days of dotcom, and even Web 2.0, it’s high time for talk of yet another bubble. Is it just me, or are these bubbles happening at a quickening pace?
Many sources in the tech industry are beginning to raise concerns over the potential of a growing tech bubble. This recurring anxiety follows every wave of major tech development, but it’s still troublesome to say the least. This time social-media is in the spotlight, particularly Facebook with its massive investment round, and Groupon’s upcoming $15 billion IPO.
“In 2009 Facebook was worth $10 billion, curious how this jumped to $50 billion in January of 2011.( Is it just because Goldman Sachs said so?)”
Facebook generates most of its revenue from online advertising, and unless they start selling profile data like they are big brother, we are going to go on ad revenue.”
This criticism becomes particularly concerning when compared with the potentially fragile internet ad growth figures, and the serious drop the consumer sentiment segment has seen and from which it still hasn’t fully recovered. Groupon in turn and its $15 billion public offering raised questions about whether or not social media is developed enough to be considered and sustained as a mainstream, revenue-generating business.
A social networking bubble may be waiting just around the corner, but there is also a prospect of this industry’s evolution to a fully-grown, profitable market segment. Social networking after all already generates revenue, unlike earlier .com companies.
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