Future of Social Media

In nearly every one of the talks I have given over the last few months, my corporate clients will inevitably ask me about what my prediction of the future of social media will be.  I expect they want to hear about how social media will take over the world and all their customers will be plugged into the social media world.  I have had a lot of time to think about this matter and have seen how the social media landscape has changed over the last few years.  So here is my take….no punches pulled:

 

–  There is no money to be made in social media inspite of what so-called gurus talk about potential business models for Twitter or Facebook.  By money I mean profit after expenses.  The growth of Twitter and Facebook mean that they are always adding new machines and technology to keep up with their every growing but never paying customers.  Sure they make “some” money in different ways, but the truth is, the equation:  Cost > Income will lead to a situation where someone needs to pick up the tab for the balance.

–  The reason why no one wants to pay is because the value of the social connection isn’t high enough to justify forking money over.  Seriously, how many people out there (excluding companies) would want to pay for their Facebook account?  Even if they did, if most of their connections gave up their accounts they would soon give theirs up too.  Twitter is even worse…how much will you pay to receive bite sized spam?

–  Are there any other ways in which these sites can make money?  Sure, but none of them have figured it out yet.  As a consultant, I often tell clients to focus on the “social” aspect of social media…..that doesn’t mean folks at Facebook, MySpace, Twitter, etc….do too…..  One of the reasons why Google was so successful was because they had the technology to keep their expenses extremely low inspite of an exponential growth in their hit rate.  They used technology to stitch together cheap servers to form massive farms that kept their business growing.  Facebook is buying expensive servers as their clientele increases……with no appreciable increase in revenue….

–  Social Media is always about the next big thing…..  In the 1990’s people forget that one of the earliest social media sites was SixDegrees (now part of Vignette), then there was MySpace, now there is Facebook, tomorrow something else….Social Media is evolutionary and we are always on the lookout for the next big thing.  Customer loyalty is practically nil and the barriers to switching is only how long it will take to get your existing network up and running on a new platform as long as it has better features, made even easier today with features like Facebook Connect.

 

I predict in the next five years, a wave of consolidation in the Social Media space.  As with MySpace, I doubt that Facebook and Twitter can continue as independent entities.  I’m not very positive with Twitter.  I really fail to see how much value can be derived from an internet sms service.  Maybe if Microsoft were to add it to their Windows Live suite it might make some sense.  Facebook on the other hand would be best served by being part of Google.  It would be an ideal match technologically.  Either that or Facebook somehow find a way to start a Paypal like service and make use of their platform for e-trading.

 

Having lived through the internet explosion and now seeing the same foolish valuations placed on Social Media sites, its not hard to use historical references to infer what the market may look like in five to ten years.  To those who think I am excessively negative, I just hope that they are right……

 

Tong Hsien-Hui

Government taking over the net? Part 2

So now we have the infrastructure aspect done up.  Each country controls and runs their internal ISPs.  All net traffic thus passes through their servers before making their way out to the rest of the world.  There is now control of new online IDs being created although who is actually creating them may be harder to pin down.  I suppose the next step would be to create unique identifiers for each person before they can log on to the internet.  This would only be possible if the government themselves offered internet access free within their own country.  With the increasing prevalence of fingerprint recognition hardware, a person could log on to the net with his/her own bio ID.  Thus everything that person does on the net is now logged and retrievable.  It  is now possible to identify the person behind each action taken on the internet.  Sure, there are details to work out as to how to prevent or minimize fraud, etc….but this is already done imperfectly in the real world so I will gloss over that for the moment.

 

Tong Hsien-Hui

Government’s taking over the net? Part 1

This last week in Singapore, there have been quite a number of discussions regarding the role of Government within the domestic internet community.  The implication of the Government regulating the online community was met with derision, anger and not a few stupid comments that seemed to justify the Government’s stand.  In the end however, the relevant authority came out to state that this would not be the course of action they would take….for the moment.

This issue got me to thinking too however.  Should they really want to police the internet, how would any Government go about it?  I believe that its a matter of looking at what the internet really is.  Effectively, the internet to all intents and purposes is a world, no different from the world we live in.  That being the case, shouldn’t it be policed the real world is?  But how will this be done?  The NSA together with Homeland Security spends billions of dollars data mining the online traffic to pick out the nuggets of critical information that could lead them to a plot being hatched to destroy property or cause damage in the real world.  Does it make sense to do so however?  I think that with a fundamental shift in thinking, Governments can take automatic control of the key channels of the internet.  All they need to do is to takeover and run all the ISPs in the country.  If each country were to do this, it would be easy to impose strict guidelines on the users and the concept of anonymity would be significantly reduced.  Obviously it is not possible in practice to monitor every keystroke made by every user within the country, but it is no different from the real world where you can’t possible monitor all the conversations that take place in the country.

Fact is though, I love the internet as it is, with all the negative and sometimes gross things on it.  I’ve had more negative reviews and comments than positive ones, but that doesn’t make me want someone to control it.  However, this intellectual exercise is interesting and I will post more once I have had time to think through more of the issues.

Hsien-Hui, Tong