2 posts tagged Social media

For some crazy reason, I’ve set out on a mission to reread the most important books from a class I took in college called Contemporary Civilization (political and economic philosophy).  I wrapped up Marx’s The Communist Manifesto last night.  It was shorter than I remember.

At the most basic level, Marx sets out to extol the virtues of a classless society.  Communism is often confused with socialism (rule by the working class), but both schools of thought are rather Utopian.

It’s interesting to look at Marx’s take on communism in relation to social media.  Social media, in its purest form, is a purely classless society.  Everyone enters with the same credentials, capabilities, and choices.  In essence, it’s an open playing field where the only way to sustain community is to work together (i.e. share information).

Alas, this does not last forever.  People segregate themselves into affinities.  They befriend and follow people with similar interests or those they admire.  Within these verticals, some members are more established and popular than others.  There’s a definitive hierarchy that has grown out of a platform intended to be classless.

Look at Twitter.  Celebrities of all kinds have more followers and more clout than the average user.  Tumblr has even cultivated its own breed of “Tumblr Celebrities.”  On Facebook if you exceed a certain number of friends your profile becomes a fan page.  Maintaining a classless community in social media is impossible.  Inevitably, a bourgeoisie equivalent will emerge.

This is not a bad thing.  I’d argue that it’s a good thing.  Social media platforms are egalitarian in that they offer everyone the same foundation, but people can make conscious and independent decisions as to how they use it.  Fortunately, people have developed vibrant ecosystems around their interests, propagating activity and growth.

Social media has Marx turning in his grave, but it’s also inspiring people to learn, engage, and aspire.

Chris Dixon wrote a piece today asking if online business model innovation is slowing down.  In relation to social media, my take on the matter is quite simple: it cannot slow down.  This is true for multiple reasons.  Mainly, I think that “where people spend time, money will follow.”  If enough people are using the same resource to solve their problems, consume information, or entertain themselves, there is a way to monetize.  However, this doesn’t mean that it’s going to be Google-type monetization of $22B a year.

Social media business models will probably have great difficulty capitalizing on purchasing intent (where Google sees it’s highest margins).  What social media provides (Tumblr, Facebook, Twitter) is an outlet for interaction, information, and expression - or consumption intent.  Opposed to other online mediums, end users consume information from their peers and sources they selectively follow, not a source generated by an algorithm.

The benefit of the social media model is that we receive information from people we trust.  We read the articles referred to us by people we admire.  We buy the things that received glowing reviews from our peers.  We interact with people with the same interests.  And we constantly share with the desire to inform, impress, educate, and engage.  So while social media may never be able to create an AdSense equivalent, it has the advantage of user engagement - people want an answer, but the ride is just as valuable as the destination.

Social media can employ countless monetizable features - some more efficient and with higher margins than others.  The fact of the matter remains that there is no single best practice for monetizing social media right now, and that’s a very good thing.  It leaves the door open to new business models and innovation around revenue streams.  It’s an exciting time to be in this space, and even if there is no AdSense for social media, there will be a new paradigm for business on the internet - and that is equally exciting.