Are Social Networks on the Verge of a Decline?
Social media and social networks are probably at the peak of their popularity. Issues surrounding social media are covered extensively by the popular press and are the subject of numerous academic studies. With all this hype in the popular and academic press, investors are pouring billions into the companies behind the popular social media websites. This drives the price of social media stocks relative to their earnings above the level of well-established, profitable technology companies. The hype, together with unrealistic financial expectations could turn out to be a sign of a nearing decline in popularity of social networks. This decline in popularity may be especially problematic for social networking sites that do not offer to their users much value beyond networking capabilities. Companies engaging in social media efforts should anticipate a possible decline in the popularity of social networks and focus on delivering real value to their audiences via social networks.