Trends That Should R.I.P. in 2008: #1 – Social Networking Sites
These are the trends I feel that should be laid to rest in 2008, which I intend to discuss across various posts.
Social Networking Sites
The social networking space is a bad business idea, and it’s beyond me why entrepreneurs continue to go into this type of medium – other than to do a “smash and grab” job to make fast money and cash out to the highest bidder; more on that later.
The social networking business is one that relies on fickle users who continuously prove that they have short term loyalty. After a year or two, they leave one social networking site in order to be apart of the “new thing” that everyone is talking about. Just look at the social networking sites that have taken off then crashed and burned throughout the years: the Globe, Friendster, Google’s Orkut, and Yahoo 360, the later two of which were barely alive to begin with. Up next on the death watch list are Bebo, MySpace, and eventually Facebook because everyone will move to LinkedIn or Ning. Aside from me thinking that it’s stupid to re-setup a profile all over again – because you can’t currently take your data with you, which is an issue that may or may not be resolved with OpenSocial – I just don’t see much purpose in social networking sites. They don’t do or offer anything useful to the average user other than LinkedIn and perhaps Ning.
As for founders and investors in social networking sites, their business is only beneficial if they cash out while they’re hot; otherwise, they’re in a business that lives and dies by the fickleness of its users, which is something Mark Zuckerberg should take note of. That being said, I think companies that acquire social networking sites are dumb for doing so because they’re throwing their money away. Companies acquire these sites for the user base; however, the end result is a bad move considering the users will eventually flock away. We’ve seen an exodus of users too many times in the past, and I don’t see people settling down with just one social network anytime soon.