Social media stock bubble

Last updated

The social media bubble is a hypothesis stating that there was a speculative boom and bust phenomenon in the field of social media in the 2010s, particularly in the United States. The Wall Street Journal defined a bubble as stocks "priced above a level that can be justified by economic fundamentals," [1] but this bubble includes social media. Social networking services (SNS) have seen huge growth since 2006, but some investors believed around 2014-2015, that the "bubble" was similar to the dot-com bubble of the late 1990s and early 2000s.

Contents

In 2015, Mark Cuban, owner of the Dallas Mavericks NBA team and star of the TV show, Shark Tank, sounded an alarm on his personal blog over the social media bubble, calling it worse than the tech bubble in 2000 due to the lack of liquidity in social media stocks. [2] A year prior, however, Cuban told CNBC that he did not believe social media stocks were on the verge of a bubble. [3] In a letter to investors in 2014, David Einhorn, who runs the hedge-fund Greenlight Capital, wrote that "we are witnessing our second tech bubble in 15 years." [4] He went on to write, "What is uncertain is how much further the bubble can expand, and what might pop it." Einhorn cited several factors supporting the existence an over-exuberance including "rejection of conventional valuation methods" and "huge first day IPO pops for companies that have done little more than use the right buzzwords and attract the right venture capital." [4]

Since those claims, services like Facebook, Twitter, Instagram, and Snapchat have grown to become multi-billion-dollar corporations generating enormous revenues, [5] though some continue to lose money. [6]

History of social networking services

Social networking services have grown and evolved with time since the launch of SixDegrees.com in 1997. [7] Cutting edge at its time, SixDegrees.com allowed users to create a profile, invite friends, and connect within its platform. At its peak, SixDegrees.com had more than 3.5 million users. Between 1997 and 2001 more social sites aimed at allowing users to connect with others for personal, professional, or dating reasons. [8]

Friendster and MySpace were next to enter the social SNS arena, followed by Facebook in 2004. Even though MySpace had a following of more than 300 million users, it could not compete with Facebook, which now has overtaken the social networking world. However, as development of SNS started to emerge, a market saturation began to take effect. [9]

Some classrooms have begun to incorporate technology in daily learning as well as social channels specific to student's course work. Traditional social media sites are used, as are educational oriented sites such as ShowMe and Educreations Interactive Whiteboard. [10]

Launch Dates of Major Social Networking SitesWebsite
1997 SixDegrees.com
1999 LiveJournal · AsianAvenue · Black Planet
2000 LunarStorm · MiGente
2001 Cyworld · Ryze
2002 Fotolog · Friendster · Skyblog
2003 LinkedIn · MySpace · Tribe.net · Open BC/XING · Last.FM · Hi5
2004 CouchSurfing · Orkut · Dogster · Flickr · Piczo · Mixi · Facebook (Harvard-only) · Multiply · aSmallWorld · Dodgeball · Care2 · Catster · Hyves
2005 Yahoo 360 · YouTube · Xanga · Cyworld · Bebo · Facebook (High School Networks) · Ning · AsianAvenue (relaunch)· BlackPlanet (relaunch)
2006 QQ (relaunch) · Facebook (corporate network) · Windows Live Spaces · Cyworld (U.S.) · Twitter · Facebook (everyone)

Controversies

While SNS continue to play an influential role in helping people form real-world connections via the Internet, renewed concerns over the social media bubble have surfaced due to recent controversies. These threats include growing concerns about breaches in data, the rise of bot accounts, and the sharing of fake news on SNS platforms. There are also concerns that big data figures associated with these SNS are inflated or fake, [11] as well as worries about the role the platforms played in national elections (see Russian interference in the 2016 United States elections). These issues have resulted in a lack of trust among the sites' users. [12]

See also

Related Research Articles

The generalized other is a concept introduced by George Herbert Mead into the social sciences, and used especially in the field of symbolic interactionism. It is the general notion that a person has of the common expectations that others may have about actions and thoughts within a particular society, and thus serves to clarify their relation to the other as a representative member of a shared social system.

<span class="mw-page-title-main">LinkedIn</span> Professional network website

LinkedIn is a business and employment-focused social media platform that works through websites and mobile apps. It was launched on May 5, 2003 by Reid Hoffman and Eric Ly. Since December 2016, LinkedIn has been a wholly owned subsidiary of Microsoft. The platform is primarily used for professional networking and career development, and allows jobseekers to post their CVs and employers to post jobs. From 2015, most of the company's revenue came from selling access to information about its members to recruiters and sales professionals. LinkedIn has more than 1 billion registered members from over 200 countries and territories.

SixDegrees.com was a social network service web site that initially lasted from 1998 to 2000 and was based on the Web of Contacts model of social networking. It was named after the concept of six degrees of separation and allowed users to list friends, family members and acquaintances whether registered on the site or not. External contacts were invited to join. People who confirmed a relationship with an existing user but did not go on to register with the site continued to receive occasional email updates and solicitations. Users could send messages and post bulletin board items to people in their first, second, and third degrees, and see their connection to any other user on the site.

<span class="mw-page-title-main">Social networking service</span> Online platform that facilitates the building of relations

A social networking service or SNS is a type of online social media platform which people use to build social networks or social relationships with other people who share similar personal or career content, interests, activities, backgrounds or real-life connections.

danah boyd Social media scholar and youth researcher

Danah boyd is a technology and social media scholar. She is a partner researcher at Microsoft Research, the founder of Data & Society Research Institute, and a distinguished visiting professor at Georgetown University.

Facebook has been the subject of criticism and legal action since it was founded in 2004. Criticisms include the outsize influence Facebook has on the lives and health of its users and employees, as well as Facebook's influence on the way media, specifically news, is reported and distributed. Notable issues include Internet privacy, such as use of a widespread "like" button on third-party websites tracking users, possible indefinite records of user information, automatic facial recognition software, and its role in the workplace, including employer-employee account disclosure. The use of Facebook can have negative psychological and physiological effects that include feelings of sexual jealousy, stress, lack of attention, and social media addiction that in some cases is comparable to drug addiction.

<span class="mw-page-title-main">Tagged (website)</span> Social discovery website

Tagged is a social discovery website based in San Francisco, California, founded in 2004. It allows members to browse the profiles of any other members, and share tags and virtual gifts. Tagged claims it has 300 million members as of 2014. As of September 2011, Quantcast estimates Tagged monthly unique users at 5.9 million in the United States, and 18.6 million globally. Michael Arrington wrote in April 2011 that Tagged is most notable for the ability to grow profitably during the era of Facebook.

A professional network service is a type of social network service that focuses on interactions and relationships for business opportunities and career growth, with less emphasis on activities in personal life.

<span class="mw-page-title-main">Social information processing (theory)</span>

Social information processing theory, also known as SIP, is a psychological and sociological theory originally developed by Salancik and Pfeffer in 1978. This theory explores how individuals make decisions and form attitudes in a social context, often focusing on the workplace. It suggests that people rely heavily on the social information available to them in their environments, including input from colleagues and peers, to shape their attitudes, behaviors, and perceptions.

<span class="mw-page-title-main">Renren</span> Chinese social networking service

The Renren Network, formerly known as the Xiaonei Network, is a Chinese social networking service similar to Facebook. It was popular among college students. Renren Inc. has its headquarters in Chaoyang District, Beijing, with additional offices in Shanghai and Guangzhou. Renren had an $740m initial public offering (IPO) on the New York Stock Exchange in April 2011.

<span class="mw-page-title-main">Gender differences in social network service use</span> Differences between genders with regard to use of social media and social network service

Men and women use social network services (SNSs) differently and with different frequencies. In general, several researchers have found that women tend to use SNSs more than men and for different and more social purposes.

Since the arrival of early social networking sites in the early 2000s, online social networking platforms have expanded exponentially, with the biggest names in social media in the mid-2010s being Facebook, Instagram, Twitter and Snapchat. The massive influx of personal information that has become available online and stored in the cloud has put user privacy at the forefront of discussion regarding the database's ability to safely store such personal information. The extent to which users and social media platform administrators can access user profiles has become a new topic of ethical consideration, and the legality, awareness, and boundaries of subsequent privacy violations are critical concerns in advance of the technological age.

<span class="mw-page-title-main">Filter bubble</span> Intellectual isolation involving search engines

A filter bubble or ideological frame is a state of intellectual isolation that can result from personalized searches, recommendation systems, and algorithmic curation. The search results are based on information about the user, such as their location, past click-behavior, and search history. Consequently, users become separated from information that disagrees with their viewpoints, effectively isolating them in their own cultural or ideological bubbles, resulting in a limited and customized view of the world. The choices made by these algorithms are only sometimes transparent. Prime examples include Google Personalized Search results and Facebook's personalized news-stream.

This page is a timeline of social media. Major launches, milestones, and other major events are included.

Nicole Ellison is the Karl E Weick Collegiate professor in the School of Information at the University of Michigan. She is best known for her research in the fields of computer-mediated communication, social media, and social networking sites. Her research has been cited over 83,000 times according to Google Scholar.

MeWe is a global social media and social networking service. As a company based in Los Angeles, California it is also known as Sgrouples, Inc., doing business as MeWe. The site has been described as a Facebook alternative due to its focus on data privacy.

Privacy settings are "the part of a social networking website, internet browser, piece of software, etc. that allows you to control who sees information about you". With the growing prevalence of social networking services, opportunities for privacy exposures also grow. Privacy settings allow a person to control what information is shared on these platforms.

The advent of social networking services has led to many issues spanning from misinformation and disinformation to privacy concerns related to public and private personal data.

A shadow profile is a collection of information pertaining to an application's users, or even some of its non-users, collected without their consent. The term is most commonly used to describe the manner in which technological companies such as Facebook collect information related to people who did not willingly provide it to them.

<span class="mw-page-title-main">Jessica Vitak</span> American information scientist

Jessica Vitak is an American information scientist who is an associate professor at the University of Maryland. She is faculty in the University of Maryland College of Information Studies (iSchool) and Communication Department. She serves as Director of the University of Maryland Human–Computer Interaction Lab (HCIL) and an Associate Member of the Social Data Science Center (SoDa).

References

  1. ↑ Hanke, Steve. "Wall Street Correction, Yes -- Bubble, No". Forbes. Retrieved 2019-04-26.
  2. ↑ "Why This Tech Bubble is Worse Than the Tech Bubble of 2000 | blog maverick" . Retrieved 2019-04-26.
  3. ↑ Belvedere, Matthew J. (2014-07-25). "I don't see bubble in social media stocks: Cuban". www.cnbc.com. Retrieved 2019-04-26.
  4. 1 2 Roche, Julia La. "DAVID EINHORN: 'We Are Witnessing Our Second Tech Bubble In 15 Years'". Business Insider. Retrieved 2019-04-26.
  5. ↑ Kinahan, J. J. "Twitter And Facebook: Social Media Takes The Earnings Stage". Forbes. Retrieved 2019-04-26.
  6. ↑ Green, Timothy (2019-02-06). "Snap Is Still Losing a Ton of Money -". The Motley Fool. Retrieved 2019-04-26.
  7. ↑ "Then and now: a history of social networking sites". www.cbsnews.com. Retrieved 2019-04-26.
  8. ↑ Boyd, Danah M; Ellison, Nicole B. (2007). "Social Network Sites: Definition, History, and Scholarship". Journal of Computer-Mediated Communication. 13 (1): 210–230. doi: 10.1111/j.1083-6101.2007.00393.x . ISSN   1083-6101.
  9. ↑ Ellison, Nicole B.; Boyd, Danah M (2007-10-01). "Social Network Sites: Definition, History, and Scholarship". Journal of Computer-Mediated Communication. 13 (1): 210–230. doi: 10.1111/j.1083-6101.2007.00393.x .
  10. ↑ Miller, Gary J. (2018-10-02). "Technologies in the Classroom: Advancing English Language Acquisition". Kappa Delta Pi Record. 54 (4): 176–181. doi:10.1080/00228958.2018.1515546. ISSN   0022-8958.
  11. ↑ "Bursting of the social-media bubble". Big Data, Plainly Spoken (aka Numbers Rule Your World). Retrieved 2019-04-26.
  12. ↑ Arnold, Andrew. "Consumer Trust In Social Media Is Declining: Here's How Brands Should Change Their Strategies". Forbes. Retrieved 2019-04-26.


This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.