Social Media – Enabling the greatest social experiment of modern times
Posted on February 25, 2015. Filed under: Uncategorized | Tags: benefits of social media, celebrities on social network, economic activity of social media, facebook, Google, making money from social media, politics using social media, social experiment, social media, society |
The advent of Social media platform has given us the opportunity to create the largest social experiment in modern human history, it is quite clearly, the biggest study of social behaviour of modern HUMANs. I believe, developing a better understanding of human psychology is key to everything we do as a human being, be it, creating a better and efficient financial markets, a sustainable business and economy, public policies, human relationships among other things.
Today we live in a world where social media has a very significant and visible presence, and a sizeable percentage of the world’s population is now actively using various types of social networking platforms. And this has created an opportunity for business as well as politics to evolve.
So a company is now able to collect a better and faster feedback from its consumers. For example, a marketing firm with access to social media can now follow a wide range of people spread across the world, and better profile their behaviours as consumers as well as individuals. The informations collected through social media are being widely used by companies. And companies that are able to keep an interactive and engaging presence on Social Networks are benefitting from it. The prime example is TESLA, by using social media, the company was able to quickly spot the problem with fire issues related to its Model S cars, and managed to quickly respond to its customer base by engaging in an interactive conversation enabling it to win back confidence of its customers.
And besides commercial companies, political parties across the world today are learning to better utilise the social media as a tool to put their message across and connect to their audience. There are also new types of social media celebrities with millions of followers enabling them to make money by promoting and endorsing various products.
Based on recent studies, it is estimated that in the year 2014, a social media platform like FACEBOOK managed to create $ 227 billion worth of economic impact globally. And Google’s own report suggests that it generated over $ 111 billion worth of economic activity in 2013 for 1.5 million U.S. based businesses alone . Although measuring the direct and indirect economic impact of social media is still a work in progress, there is little doubt about its overall impact on the society in general.
And besides the economic impact, here is what I believe this social experiment has helped us learn about ourselves so far.
– in general most of us like and enjoy connecting, and connectivity
– we like to be appreciated and liked by others
– we like to share and crave feedback
– we have opinion on almost anything and everything, and we do like to express our opinions if given an opportunity
– people tend to follow and respect those they like
– people have the ability to spot pretence and have a soft spot for people who we tend to think are more or less genuine
– we like creating communities, and we are in fact, a social being
– most of us like being useful
–in general people do tend to have interest in other people’s lives
– new revolutions and movements are now being created and spread through social media
– social media has created a new breed of celebrities
– people do tend to reveal themselves through their words and what they post and share on social media.
And there are many other aspects of human behaviour and personality that is getting manifested and reflected through social media including obviously the SELFIE phenomena.
Social media is no doubt the invisible force that is reshaping parts of our society, and like any HUMAN idea , it isn’t perfect. The increasing connectivity has made our world smaller by bringing people and society closer, but a person and the society in general can’t just exist and live in a virtual world. And whatever may become of social media going forward, I believe , it is evolving into one of the greatest social experiment of modern times, and if as a society we learn to better utilise it as a tool that not only has economic impact, but also allows people to connect, reach out, openly discuss wide ranging ideas, enables collaboration, helps to openly discuss and settle grievances, learn about each other and the world around us then we could all possibly work together to create a better society, and in the process build a better tomorrow. But it will all depend on the choices we make today and going forward !
The BUSINESS OF SOCIAL MEDIA and NETWORKING SITES
Posted on March 4, 2014. Filed under: Uncategorized | Tags: Autonomy, BlackBerry, BlackBerry Messsenger Service, celebrities on social network, Company Valuation, facebook, Google, HP, instagram, instant messaging business, Pininterest, price, Silicon Valley, social media, social network users, social networking, Technology companies, TESLA, twitter, VeriSign, VINE, WhatsApp, Yahoo |
Today we live in a world where social media has taken a centre stage and a sizeable percentage of the overall world population is actively using various types of social networking platform. Social Media is about connectivity and interactive engagement where a single POST or an OPINION is shared, liked, and commented upon creating a feedback loop almost immediately.
So a company today is able to collect more or less an accurate feedback from consumers without a time lag. For example, a company or a marketing firm with access to thousands of emails can now follow the individuals linked to each emails on a social media platform for a week or months and better profile their behaviours as consumers as well as individuals. And these sort of informations are extremely important for a company. So companies that are able to keep an interactive and engaging presence on Social Networks will surely see the benefit. Take for example TESLA, by using social media networks the company was able to quickly spot the problem with Model S fires and managed to instantly respond to its customer base and got engaged in an interactive conversation winning back most of the customers or as TESLA would say ” able to correct the misperception ” around the product.
And besides commercial companies today you have authors, universities, celebrities of all sorts connected to their audience on various social networks and able to instantly promote a book or simply keep their readers informed and also every now and then get engaged in an interactive discussion enabling an author to better understand their readers and expectations etc. Universities are not only able to promote themselves but also get engaged in various types of conversation, debates etc. And Celebrities have 24×7 instant connection with their fan base enabling them to not only promote a movie or an album etc but also interact with their audience on day to day stuff. Researches and LABS are creating communities on social networks that allows them instant connectivity and visibility with a wide range of audience and the open nature of the social media platforms is helping them create better, open and efficient collaboration. So a research post or a headline is instantly picked up by thousands and the commentaries with all types of opinions comes pouring in immediately.
In short with the advent of Social media networks, we have started to live in a 24×7 very interconnected world where OPINIONS on anything and everything are shaped and re shaped almost immediately.
And overtime the SOCIAL MEDIA space will most likely evolve and that’s already happening. For example look at INSTAGRAM, today it has it’s own interactive community with millions of user in social media. Then you have VINE ( the video sharing platform ) which has over 40 million active users. PININTEREST has also started making waves in the social media space with over 10 million active users on a monthly basis. So the social media space is clearly evolving and will continue to evolve going forward.
But as a word of caution I must add that the astronomical PRICE TAG that most of these platforms carry does create an inherent bubble because it is very likely that some of these ideas will or may fail down the road and also the core business model will need to evolve to make sure the underlying business is and remains sustainable. There is also a real risk of SOCIAL MEDIA FATIGUE as evident from the fall in overall usage of social networking sites like Facebook, Twitter by average folks and this is why leading companies like Facebook would need to be forward looking in order to stay relevant and most likely the recent acquisition of whatsApp by Facebook carrying a whooping $ 19 billion price tag is a part of that strategy.
And some would rightly argue that overpaying is quite a risky way to grow your business and many Silicon Valley based companies have already paid the price of getting overboard with an acquisition. And here are some examples of spectacular failed acquisition. After paying $ 15.3 billion to acquire Network Solutions, VeriSign sold the company for just $ 100 million taking a write down of $ 15.2 billion. The other one that comes to mind is Terra Network’s $ 13.8 billion acquisition of LYCOS only to sell it later for $ 95 million. Then there is HP’s $ 8.8 billion write down over AUTONOMY. And the list goes on. In short Silicon Valley does not have a solid track record in being able to monetise pricy and premium acquisitions.
So is quite plausible that Facebook may have to take a write down on the price it paid for WhatsApp going forward because the instant messaging space is quite crowded and even with a freemium model “FB” may struggle to generate the sort of return required to justify the $ 19 billion price tag but this blockbuster acquisition has clearly pushed up the overall valuation of the instant messaging companies and in most likelihood BlackBerry Messenger Service could be one of the biggest beneficiary.
A business needs to keep evolving to stay relevant and the same rule applies for businesses operating in the social media space. The difference is Social Networking sites don’t sell a product to their user base but instead use all of their users as PRODUCTS to make money. So the users i.e. all of us ( as users ) will have a strong say in what happens to companies operating in the social media space. And with regards to social media platform as an investment, I personally believe the astronomical valuation could potentially be damaging to the overall progress of the sector because remember perception plays a key role so a couple of big failures could seriously put off investors and this is why businesses operating in the sector will not only have to evolve in terms of the uniqueness of their respective services but also on how they generate and create revenues going forward as for now almost all of them have a similar revenue model. And companies like Facebook can and should learn from Google on how to build a real and sustainable business.
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