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Is Social Media a Bubble?

by Shaun R Smith on March 2, 2010

I’ve been through a couple bubbles – and been personally burned.  Despite my finance degree, market timing is not my gift.  I jumped into the Canadian gold bubble of the mid-90’s – just in time for it to crash.  I eventually got a letter from my broker basically saying the stocks were worth less than the postage for the statements so they weren’t going to bother sending them.  Then I jumped into the Internet stars after having resisted the temptation for years.  I think in that bubble, I was the last bear to capitulate – signaling the peak of the market.  I still am amazed that Henry Blodget can find a job as a finance show host.  Do we have no memory at all?  Finally, I purchased in the real estate market – after the bubble had burst luckily for me, but not long enough after the peak to feel good.  It was still going down when I bought, much to my chagrin.

The current craze over Twitter and “Social Media Marketing” has a very similar smell and feel to a financial bubble.  I’m hearing people say, “it’s impossible to measure return,” which reminds me of the valuations based on clicks instead of actual revenue (let alone discussions of profit) that I heard in the late 1990’s.  I’m seeing people trying to extract value without providing any – and succeeding in some cases.  I’m seeing everyone jumping on the band wagon.

Only this time, it’s not their money at risk – it’s their TIME.

At least money is a renewable resource.

Photo By: http://www.flickr.com/photos/dist0rtedwave/ / CC BY 2.0

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