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The Next Looming "Commodity" Failure: Social Media
Today, there is no other space that could experience the same fate that is now tearing through the commodity sector in my opinion than social media. This data mining area of everything social and eyeballs-as-currency I believe is about to hit a vein flooding it with so many get-out-of-Dodge sellers – there won’t even be time enough for the last person turning off the lights to take a selfie.
When it happens it will happen quick and catch just as many if not more off guard than the often comparable dot-com bubble of the late 90’s. Why? Because near to a person currently involved in anything social )even those that have been through that last bubble popping) have bought into the meme “It’s different this time” but holding onto it hook, line – and sinker.
Over the past few weeks I have been monitoring a few predominantly V.C. centered news outlets along with a few other tech based “inside baseball” formulated venues. These are the sorts where one can really get a good grasp on what is really taking place within a certain “world.” Along with how that world views itself and where it’s going. The more I listened, read, and watched? The more convinced I became its social media (along with Silicon Valley) itself that’s ripe for a boatload of disruption. i.e., crushing reality, unicorn tears, and discontent.
To my eyes no space resembles the commodity sector than social media. Commodities such as “also ran” or “me too” are everywhere. Want to take and share selfie? Or how about what you had for dinner, or profess to the world you showered or just brushed your teeth? Well, there’s an app or social media site for that.
There’s not only “an app or “site” – there’s 12,946,294,946,038 of them and counting to choose from. And: you can try every one if you wish for free. If – you have a life expectancy to match the task.
Want to know a dirty little secret you don’t need an app to view for why they’re free? Because: their “target customer group” will drop them in a nanosecond (if not faster) and rush to the next in succession if they were ever to charge. Loyalty means – “give it to me for free – or else!” And here’s another little secret, one that’s seen as blasphemy by some and pornographic by others that needs no credit card to view. When money becomes tight -150 billion (or whatever) bloodshot eyeballs that won’t pay a red cent – are worthless.
But wait I can hear through my monitor: What about ads?! You forgot to mention ads; as in ad revenue. Eyeballs for ads!!
Right. You know why I didn’t mention it? Eyeballs for ads are probably the most over-harvested, over-mined commodity social media has dredged through. And you know what? 250 billion eyeballs aren’t worth a nickel more than 150 billion if the resulting conversion rate of a sale that produces a net profit is zero. As a matter of fact – 150 billion aren’t worth one penny than only 100 if again the sales conversion rate producing a net profit is again: Zero. And I believe many in the ad space that pay for these ads are going to re-access and redistribute their precious ad dollars to other areas. Reason?
They have more than enough eyeballs. And they don’t need another 1. That commodity has been mined and stockpiled to near infinity. What ad dollars or media buyers now need are eye balls connected to wallets both willing and able to spend. For companies supplying those precious ad dollars are going to demand it. That’s going to be the next test of any platforms mettle in the coming weeks, months, if not years. And it’s not a commodity.
Any company that can show they can deliver 10 paying customers vs 200 trillion eyeballs free will hold the keys to this sectors vault. Regardless of what is said via the financial media as well as the main stream media; social’s not getting it done. And as the economy turns stagnant if not lower – getting it done (as in generating net profits via 1+1=2 elementary math) will be as precious, if not more so: than gold.
Recently I gave an intimate talk at a luncheon for an organization built around start-ups and V.C. funding. The organization is a considerable player within this space located in the Midwest. After my talk during the Q&A we delved a little deeper into the whole social media and start-up mindset. The discussion confirmed much of what I have been articulating previously.
For one: As far as metrics (e.g. R.O.I. per ad spending) when utilizing these platforms the results they received (I need to reiterate here, this is their space and marketplace for investment and ideas) were not horrible – they were abysmal. Engagement, and more was considered pathetic and “a complete waste of time and money.” Again, this was coming from an area one would think would be its greatest cheerleader.
Those cheer-leading days are over, and you could see it in the faces of people who have stopped drinking the KoolAid®. What you could also tell from speaking with them is being away from Silicon Valley has allowed more prescient thinking to come into play. For just like if one finds themselves in an unprofitable hole, the trick isn’t to keep digging, the trick is to stop – and more importantly; move on. Silicon Valley is still digging and still producing a commodity many once enthusiastic customers no longer needs, or wants. They’ve got more non-converting eyeballs than they want or need.
Remember: If “eyeballs” are the Be-all – End-all saving metric regardless the platform. Then why isn’t Yahoo™ (which boasts of having over 800 million monthly users) worth so much more? Or better yet, why is it falling once again like a lead balloon? Easy, it was really only a proxy for its stake, and future sale of it, in Alibaba™. Looks like neither of those things are now working out, for all one needs to do is look at a chart (or one’s 401K) to see the current falling price in “eyeballs.”
The social media space is beginning to make one wonder if they’re looking at an iron ore chart, or bulk shipper, rather than “the hottest space it all tech.” i.e., everything social. And it’s just the beginning in my opinion.
[2 Year Performance of Iron Ore vs Small Cap Social Media]
Sooner or later Wall Street is going to come knocking for either its promise of profits. Or, its money back. And when that starts (which I believe has already begun) the mad-rush to cash-in what ever value a share might have that day will be assailed with stunning speed. Much like the commodity space where stalwarts of an entire sector can find themselves struggling for solvency in mere months.
This is an inherent part of the commodity business. It’s a race to the bottom. And sooner or later, the bottom drops out and mayhem ensues. Credit lines, share prices, management, equipment, personnel, share holders, everything gets scrutinized and either split up and sold off. Or bankrupted and liquidated all together. And when it happens – it happens at a breathtaking pace. The only piece of un-surety is knowing exactly where that precipice, or demarcation line of no return is.
However, what I’m a little more than convinced of is: we’re far closer too it, if not already past it, than anyone especially those in Silicon Valley itself even realize.
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Fuck facebook.
The coming Financial CATACLYSM. It'll be Ugly, Bloody, and Messy >> http://bit.ly/1KogtGi
There is just so many ad $.
You want to see the biggest no brainer short out there? Just look at LNKD. Look at that ridiculous valuation and every out of wack metric you can measure against.
And when the market implodes and job markets dry up, their revenue is going to take a massive hit. Market cap compression and plummeting revenues. Shortnado.
"And when the market implodes and job markets dry up"
LNKD has no interest nor investment in Main Street's fortunes. LNKD is serving the needs of the technical elites -- regarding which it is a possibility you know very little? -- and the technical elites are vital to the 1%-er class ... at least for a while. Maybe a long while, esp since our future distopian society will be technological in nature.
Ask me how I know these things.
When main street stops spending money they don't have on apps they don't need, don't you think that tech company pushing out the kim kardashian game app won't have a job to pay LinkedIn $400 to post?
But, but, but...,
buzz said Facebook has like 16 billion members.
( He did. Best laugh I had in a long time.)
How do you know these things Cougar?
Also, have to realize that Social Media is a data goldmine for the elite. The fact that they were taken public and fleeced main street even further is just th eicing on the cake.
Every one in the social space is selling data....every app company is selling data...
All exactly true. I think you "get it".
To your question, I know these things because I am one of the techno-mercs embedded in their sociopathic world. And they very much like what I do.
Then either stop doing it or blow it all up.
The Author has overlooked one of the main reasons that many websites exist: to gather information about the user. A huge amount of metadata comes with a visit to a site. The server can download a wealth of information about you from cookies and browsing history. Who you've visited, likes/dislikes, recent purchases, investments, political persuasion, and whether you are an influencer are all tidbits of interest. That information translates into cash for the website operators.
http://www.economist.com/news/special-report/21615871-everything-people-...
followed by extortion?
"Ask me how I know these things."
Ask me if I care.
Heard some real nasties about LNKD.
Gonna mess some folks up.
I tried your link, but there were too many things trying to 'load' past my adblocker that I couldn't read it.
When that happens, I'm outta there...Next!
Why are you clicking on a link from someone who's been here less than two days?
The mind boggles!
That's the same thing I said when replying to a free sex ad on Craigslist.
pods
I actually don't keep anything on my computer of any importance. So hackers won't find anything of value here.
And if some virus crashes this thing, I go out and get another cheap laptop, because to me, these things are the tech equivalent of styrofoam cups.
I stopped buying into the whole "Defend your computer!" thing...buying anti-virus protection, encrypting this and that...it's a scam.
Treat them as what they are...cheap and disposable. Use 'em till they die, then abandon them at the roadside and go buy another 'junker'.
If you MUST keep important things on a computer, then for the love of God buy a second one, and dedicate it for those things. Web-surf and play with another.
Ya know that ya can reinstall the OS on the dang thing and get rid of those nasty viruses? Don't have to buy a whole new machine. Just sayin'.
Oh I do that too. But eventually the mechanical parts start going as well, this key, that port, battery no longer holds a charge, etc. None of this shit is made to last.
That's why I refuse to pay extra for 'protections'. It's like buying insurance for a ball point pen.
Social Media is impevious to failure, just like newspapers with 20% return on investment and cable television providers. Now I will go back to reading Mike Lupica's column in the New York Daily News.
It's just an information collection service disguised as something fun.
EWE!!!! no need to fuck them. That's nasty! No telling what you might come down with, from those metrosexuals! I just shorted them. before today ....its so much cleaner, quieter, discreet, and pleasant ....
And especially fuck that braindead, retarded, code stealing fagboy... Fuckerman
.
Social Media is a fad.
Crony capitalist Zuckerberg cannot be in the street begging soon enough, NSA sycophant..
Sickeningly, the market value of my Bay Area McMansion is tied to Zuckerberg's fortunes.
No it's not, it's tied to the flow of hot money out of China.
I prefer antisocial media
Bitchez
Bravo! I see you just summed up zerohedge there, and quite succinctly too.
Fuckin *A*... equal opportunity haters...
Author doesn't understand the value proposition of access.
"value proposition"
You forgot to say "Sea Change" and "Going Forward."
isn't that "value prostitution"
Those lines will cross
Iron ore have value. 100 billion face bot accounts? worthless
Negative value, they would have to pay me...
Hogwash, keep on stackin' ounces of tweets and tons o' likes.
As the Ozzies say, loads and stacks of cats.
Oh wait.
Fecebook is worth 1.6 Vagintillion Likes
Magnets. How do they work?
Ad-blockers are hated in social media for a good reason.......
No. The "socials" love the ad blockers ... it's the "media" that hates them.
Much like the commodity space where stalwarts of an entire sector can find themselves struggling for solvency in mere months.
In mere days. (Fixed it.)
Social media produces retards so see they are productive.
retard selfies, the old is new
Not so much produce them as hone their already inherent retard skills....turns them into *super retards*...
Social Media = Social Disease.
You say Facebook and Twitter, I say gnorrehea and syphilis.
Social media removes context from information so others can monetize information. This removal of context will absolutely destroy human society.
Social media is currently one of the most sociopathic influences on younger generations.
*like*
Facebook is grooming an entire generation of "two minute haters" as they take the lead in shaping, trending and tracking "live normal bias". The horror.
Good article, I just linked it to my Twatter feed and updated my Farcebook status. You can follow me on YouTube as I discuss it just make sure you hit the like button and share with your friends.
Where's the "Like" button?
The "hike" button? Football related I guess.
And if you get scared the, YIKE! button. (is this how it goes here?)
No Google+??. Shame.
You all need to ask yourself what is the value to TPTB of these wide-open social media systems, and when you realize that the answer from the base of power is "tons of value" then you'll get an idea why these things have grown and spread. The profit is not in operations. The profit is not in sales. The profit is had in selling access.
And your darling ZH is so very much a part of it.
Everyone covets the Mom's basement crowd?
Who knew? (Good analysis, the money is in the list)
Basement crowd: It's okay if you think that way. We can really use the cover.
access to data in order to create thoughts before trending takes place? Considering how only independent thinkers are not able to be hypnotised, while all others are, and how truly stupid most people really are, i guess there is a lot of value in socially programming society. Being part of that is worse than the bankster crowd. Talk about dirty dollars from nefarious alphabet agencies and their spawn.
What is this social media? Can you eat it? Can you sell it or trade it? Is it even tangible?
If you are a stingy ass bastard like me who doesn't really buy anything, what good are my clicks and my eyeballs to social media?
I guess data mine my info and do research but that can only go so far.
Companies invest in traffic managers and not in the boosters on social media. And nobody clicks the adds.
Just go to any job search site and click digital or traffic manager.
And google is a victim of it's own success also.
If you google anything, the first 3 pages are only slihtly related anymore because the tags on all the sites are full of slihtly related topics these days. A few more years and people will get tired of google.
duckduckgo.com
ixquick.com
What google is doing with their page 1 results is interesting as hell.
Heres a clue for you: You entering the same search criteria into google on different days will get you nearly the same results. But two people entering the same search criteria will not see the same results. And then you have to ask yourself why one and not the other?
geographic location is the primary reason
Sure it is.
I hope, but doubt, all things currently considerable tossed into the mix, people will wake to the idea that they are being completely managed, in all forms of thought, not simply profiled and marketed to, in ways impossible to describe and then change their minute by minute "look at the phone" behavior. But, behavior being so easily "modified" as they form, and even prior to forming their thoughts via data bombardment and whatnot, that hope is quite small. Add to that, the fact that most people are truly empty and these gadgets, dings, and dongs fill their life with fake (albeit seemingly very real) social status, friends, events and all, changing the behavior of a heroin or meth addict would (and i am deadly serious) be easier than giving up their phones and all that comes with them.
Google in. Google out.
Because correlation is definitely causation.
Its that fucking red moon last night. I gotta tell you. Its just crazzzzzeeeee.
Where is John Hagee?
In a bunker, or revising his theory about end times?
http://heavy.com/news/2015/09/4-four-blood-moons-dates-supermoon-lunar-e...
Oh, what a better world if the "Christian" Ziopaths would wake up to their deception...
http://www.jesus-is-savior.com/Wolves/scofield.htm
http://www.sweetliberty.org/issues/hoax/scofield.htm
http://www.israelshamir.net/shamirReaders/english/Cathail--Scofield-Zion...
I wish all cellphones would immediately become disabled when someone enters a store totally glued to it and acknowledge the CSR behind a register. I am almost tempted to buy a scrambler which can disrupt any phone call within ten feet. Topping off the rudeness apologizing to the person who is on the other end of the phone call. TURN IT OFF!
Isn't it against the Patriot Act to disable NSA internal security devices?
We control the vertical. We control the horizontal.
What about when they get behind the wheel of their vehicle? I wish cellphones would immediately become taboo. Period.
Yesterday my wife got a phone call from her 83 year old mother -- she is living in a senior center
She ask my wife to help her set up a Facebook account.
Bullish --
The NSA and CIA may think that they have the ability to sort through all of the data and every little social media company wants to be the next darling that provides key insight to the government about the characteristics of the people that the spies want to spy on, but there is a limit to the usefullness of data and it all does not need to be refreshed ... in fact very little needs to be refreshed. People just do not change that much and once classified, the money will dry up.
I guess there are still the so called refugees who need to be classified ... well, have fun with that.
Facebook may be over...is overvalued, but in a world where everything is.
It's like saying Barry Bonds is a fraud because he juiced. Find a power hitter who didn't in that era, and we can talk about what's fraudulent, right?
Anyway - Facebook killed Myspace.... but Facebook seems to be so embedded, everyone's mom is sending fucking cat photos... and that means fatigue.
A simpler form of facebook where people can add in their own widgets and code - something both tech geeks could build out, and know-nothings {basically like me} could use fo rthe basics...
that would work, I think.
Certainly, the *concept* is here to stay and the better mousetrap argument tends to work when something becomes stale and intrusive.
The question is - could anyone build such a platform and have it be NOT controlled by the usual suspects?
Seriously - how many major, broad-appeal websites are there - social media or otherwise - that are *not* controlled by the very people who control cable/tv/news media?
People very much in bed with .gov
Once long-term facebook fatigue sets in, I'm hoping real human interaction becomes the next killer app. I think we still have a long way to go.
Video killed the radio star....
Are you indirectly suggesting that i should wish for that comet the size of a football field does hit? Ok, well i guess if that is what it takes for humans to be human again...
Title of a song from 1979
First Music Video ever played by MTV when they went active on Cable.
Was at an aunt's house on Mulholland Drive in LA. (Uncle was a winning Pro Bowler) Sat with cousins watching a countdown on the TV, no idea what it was about, 3..2...1...Guy in a spacesuit and, some assholes talking, Video killed the radio star.
I didn't even know the channel until ten years later.
https://www.youtube.com/watch?v=XBf0yJVMSzI&list=PL11dd5QkcdJDH4W1c3SQVwXSbgwmM2BBm
Then, as now, of course, it sucked ass.
Though it had it's moments...
Another
This has come up before: EMP.
It would do humanity (not the species, but the culture) a real favor!
The true value of a company is what its worth if the auditors take over and if that ever happens you wont get shit,hell these outfits probably rent their offices,furniture and servers and the cash will be long gone
I would like to see more clickbait links to listicles wanting to show me 59 more of the most embarrasing things.
everytime I try to post a comment on other sites and the "Google Everything" sign in pops up I type in "Fuck You Google" and they have yet to issue me an account.
People will always need a place to post a picture of what they will be eating for dinner.
I have been seeing Facepalm commercials on TV a lot lately. They must be hurting
Ah - well then, it seems my pleas for lighter traffic on 101 in the Bay Area have been answered...!! And the Palo Alto, Los Altos, Saratoga, Los Gatos, Willow Glen areas, etc., could stand a good stiff dose of real estate reality in any case...
from
Wooden Ships and Iron Men
to
Silicon Chips and Metro Men
Ad-based websites & apps aren't working because of their ineffectiveness (aside from the fact that there's an extremely poor ROI). I can't count how many times I'll find ads within websites that I can tell are based on my search and browsing history. Problem is, just because I've looked up something doesn't mean I want to buy it. Or, I've already bought it so there's no need for me to see the ad because I've no need to buy it again and again.
And there's no algorythm that's going to predict that just because I searched for the "Harvest Moon" necessarily means that I'm going to want to buy an astronomy telescope. Or, I've already purchased a copy of a certain book or CD, and I don't need to buy another one because... well, I already have it. Or, the research I'm doing is for work and has nothing to do with my own interests and personal tastes.
This is what gets me. They can see what I have bought. Okay. Just as you say, the vast majority of their ads are for things I have bought! i.e. I have them. They still have no idea what I will buy, because every time I think of something I need, it is nothing they are advertising to me.
I get the argument about this being about harvesting data. But even in that case, they are discovering that there are still elements of humanity that cannot be tracked and quantified. Thank God! All their data is going to backfire massively when people want FOOD and SHELTER. Because people will kill for those things. For an app? Not so much. Look what's happening in Europe. These things are related...
But it's so profitable to advertise to distracted people. Oh, look, a cat...
Squirrel, instead of cat. Watch the movie "UP"
It has been shown that the average "internet connected" person has an attention span of 8 seconds. And that's only if they are interested in the topic.
Why is Facebook and other social media companies trading at 100 P/E?
They are counting on advertising revenues, right? Well, the international pot of advertising revenue is a limited size, and not growing much, or will shrink with economic stagnation.
So tell us, HOW is FB or anyone else going to increase their advertising revenue? Especially by the many multiples it will take to catch up to their share values? All the (dumb) investors, and that includes funds, think that advertising funds/revenue are unlimited? They are in for a shock.
just short twtr. FB will be the lone survivor and crush all competitors. Why? because FB is a ZIONIST company and those remain while they destroy the other competitors. GS destroyed leh and bsc. LVS is in the macau and more exposed than any other company BY FAR yet it has barely cracked while WYNN has been DESTROYED to pieces. Follow the jew