$ocial Media: What’s the Big Deal?

There are a number of blogs (PaidContent, GigaOm, others) pointing to a Knowledge@Wharton article on valuing social media, the dot-com bubble II and the social networking phenomenon more generally. It’s a relatively interesting article and I won’t try and summarize in detail.

However, in general, the article acknowledges the social media phenomenon is here to stay and argues that there will be some winners, but doesn’t attempt to pick them because:

[T]hese social network sites are the Wild West. This is an area where it has been notoriously fickle. It’s not like search engines, where you can really compare them on objective criteria,” [Wharton marketing prof. Peter Fader] suggests, referring to established players like Google and Yahoo.

In a 2004 Kelsey Group white paper that Carlotta Mast and I wrote (mostly her), we argued that “social networking will largely disappear as a stand-alone category and become an essential layer of functionality or set of features integrated into existing sites and business models.”

Obviously the rise of MySpace and Facebook, among others, shows that some stand-alone social networks will have a place online and survive. However, the social media phenomenon is much bigger and more important than any individual site and will penetrate to most major publisher sites and models.

Online community and user-generated content, which have been around in cruder from since the beginning of the Internet, are proliferating within structured environments online that offer better tools these days. From a pure tool/functionality standpoint, Multiply is one of the best.

But there is something much bigger and more interesting going on with consumer-generated content that goes to basic human impulses to create, communicate and help other people. Sites that can help promote and facilitate those activities will see usage and traffic. How to effectively monetize those sites and how much they’ll eventually be worth are indeed challenging questions.


One Response to “$ocial Media: What’s the Big Deal?”

  1. AhmedF Says:

    And Wharton cited 90 million active users.

    If they can’t take the time to try to actually discern user numbers … sheesh.

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