The Social Media Bubble

I’m going to keep this short and sweet…

I hate to be the bearer of bad news to some out there, but we are in the middle of a gigantic Social Media bubble that is being filled with lots of hot air and empty money. Don’t believe me? Just look around and you’ll see it. For a long time now, I’ve been saying that many companies in the Social Media realm are WAY over valuated compared to their incoming revenue or purchased price. (i.e. – Facebook, Groupon, TweetDeck, IntoNow, etc.) Of course there is that little voice in my head that says, “It’s only worth as much as someone is willing to pay for it.” That being said, reality has to kick in at some point.

I’m not going to get super technical with numbers and figures of this data compared to that data. I don’t claim to be a statistician and nor will I ever be. This is not a fear mongering based tactic to get you to see your stocks or investment in a company.

What this is, is an article about common sense. Just open your eyes and ears to current events in Social Media and their overall context. The dramatic rise in value in any industry compared to the industry as a whole should raise a yellow flag of caution. The prospect of a Social Media bubble bursting is not necessarily a bad thing, per se. Companies and emotions run high; everyone starts to drink the same fruit punch. Next thing you know everyone is sick. (We’ve all been there, right?) In the ebb and flow of any type of economy and/or business there will always moments of adjustment or correction. Think of it metaphorically as going to the chiropractor.

You know the old saying, “If it sounds to good to be true; it usually is.”

Tags: bubble, Social Media, social network, social networking
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