Our Growing Dependance on Social Media
Apps like Facebook, Twitter and Snapchat have unequivocally dominated the social media network landscape for the past decade. In the third quarter 2016 earnings report for Facebook, this last year set a new record in terms of users (1.79 billion users monthly) and generated $7.01 billion of revenue. Twitter, Instagram and Snapchat all witnessed similar profits and hikes in users during 2016. If all these titans are ruling the world of social media, is it possible that other developers have just given up and are choosing to side with one of the big-name companies instead of creating a unique initiative?
The number of big-name social networks has been quite restricted to only three or four, but that result can’t be simply attributed to a lack of new initiatives. Acquisitions and mergers provide for a less than accurate portrayals of all the social networking-related initiatives that have been set forth. Big companies like Facebook and Google specifically look out for such novel companies and acquire them if the specific company in question seems to provide an edge over competitors in terms of adapting to new clientele. Facebook has acquired or merged with 61 companies, including Instagram and WhatsApp. According to The New York Times, Google actually merges with or acquires about 40 to 50 companies (such as the famed YouTube) yearly. Even though the big-name companies serve as the face of many sub-initiatives, we can’t forget the people who originally set out to revolutionize social media.
From a developmental standpoint, offers from big-name companies such as Facebook or Google are very appealing to entrepreneurs. Firstly, the big-name company will be able to invest in the acquired company and supply much more resources than the startup had to work with before the merger or acquisition. Though there’s a chance that the new company’s managers would choose to pass on these usually lucrative offers, the opportunity to take an enormous one-time sum as well as gain access to the bigger company’s assets in order to grow would be quite tantalizing and risk-free. In addition, a merger or acquisition that mirrors that of Facebook and Instagram 2012, the less-renowned company can obtain more skills through learning at the side of an already established company. As a bonus to integrating more diverse products from the established company, a startup would also be able to reduce competition and prices from the shared marketing budget with the bigger company.
If the statistics are any indication, development of social media networks is not on the wane. If anything, the social media world is buzzing with new players at an alarming rate. Before Facebook came around, there were so many roadblocks to Facebook’s growing fame including Friendster, one of the leading social media websites at the time. Even in 2004 with the advent of Facebook, it chose to turn down million dollar offers from Google and Friendster (sometimes nicknamed the “grandfather” of social media.) In 2009, Friendster’s site redesign proved to be a fateful one, as its revenue stream and number of users significantly diminished. Just as Friendster fell, networks like Facebook and Twitter gained momentum and paved a path to the top of the social networking hierarchy. Although there is no guarantee that there will be a plethora of new social media services that choose to decline big-money offers from established companies, entrepreneurship is a field abounding with multiple risks and there’s a good chance that some of the titan media networks will eventually give way to new ones.