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Social Media Crash Landing

by Randall Craig on May 17, 2011

Filed in: Blog, Make It Happen Tipsheet, Social Media

Tagged as: , ,

Remember Y2K? There were no major computer crashes, but there was, just a few months later, a technology crash of a different sort when many Dot Com’s lost most of their market value. The market learned painfully that eyeballs didn’t pay the rent – revenue did.

Today we seem to be in a similar “Social Media” heyday. The markets – public and private – are putting super-high valuations on the new social media darlings. These valuations aren’t driven by revenue (or “eyeballs”), but driven by friends, followers, and connections.

Investors should be wary, as history typically repeats itself. While some social media venues will be commercially successful, most will not. And of the 500+ social sites out there, expect a significant number of closures, consolidations, and abrupt strategy shifts. Only revenue can pay the rent.

As individuals, marketing leaders, and corporate managers, consider these four key insurance policies:

  1. Don’t put all of your social media eggs in one basket.   Remember MySpace?  A ghost town, or soon to be.
  2. Do some contingency planning: What would happen if your venue(s) of choice suddenly shut down? With “your” data?
  3. Look for ways to diversify your relationships with your connections across several channels: email, Twitter, Facebook, Blog, etc.
  4. Monitor the social media space for winners and losers. This allows you to catch the trends early …and provides an early warning mechanism just in case.

The Week’s Action Plan:

Will we really have a Social Media crash?  It’s hard to say exactly, but the parallels with the pre-Dot Com era are striking.  This week, ask the question “what if”.  A few minutes of contingency planning can make the world of difference.

Note: The Make It Happen Tipsheet is also available by email. Go to www.RandallCraig.com to register.

Randall Craig

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About 

Randall has been advising on Web and Social Strategy since 1994 when he put the Toronto Star online, the Globe and Mail's GlobeInvestor/Globefund, several financial institutions, and about 100+ other major organizations. He is the author of seven books, including the recently released "Everything Guide to Starting an Online Business", and speaks across North America on Social Media and Web Strategy. More at randallcraig.com and 108ideaspace.com.

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