Syndicate content

#10: Placing a Value on Social Media

Johanna Martinsson's picture

Our Top Ten Blog Posts by Readership in 2011

Orginally published on January 19, 2011

Lately, there has been a great deal of debate about the $500 million investment by financial giant, Goldman Sachs, and a Russian investor in the social networking site Facebook.  Sachs justified their investment by saying the company is worth $50 billion dollars.  Many financial analysts think this high dollar amount is ludicrous and unjustifiable because Facebook has not yet generated a great deal of profit.  However, the question many people are debating, and have been debating for some time, is: what is the true value of social media?

While the financial potential is yet to be determined, it’s not difficult to see the social benefits.  First of all, social networking sites have the highest amount of users on the internet. Facebook has more than 500 million active users, spending over 700 billion minutes per month.  The site is translated into some 70 different languages, and 70% of users live outside of the United States. Twitter, on the other hand, has more than 106 million users worldwide, with 300,000 new accounts created daily, and some 55 million tweets per day.  Moreover, two billion videos are being watched each day on Youtube. While Facebook and Twitter are perhaps the predominant social networking sites, they are not necessarily the top sites in other countries. In India for example, Orkut.com (owned by Google) has some 18 million users, while Facebook has 17 million.

Twitter, Facebook, and other social networking sites, have played a crucial role in raising awareness of issues and events, sharing information, organizing rallies, etc.  Just look at the recent events in Tunisia, and the Iranian Presidential election in 2009.  Both Facebook and Twitter played a crucial role in spreading news to the “outside” world, as well as assembling the masses.  However, social media’s actual role and impact on the ousting of the President in Tunisia is currently up for debate, as other contributing factors also came into play.  While the extent of social media’s role might be difficult to measure, there is no doubt it played a significant role in spreading information around the world, energizing citizens to rally, and generating outside pressure for change. 

In global advocacy campaigns, social media has become a necessary tool to engage a global audience, and to build public and political support.  Imagine if social media was around during the civil rights movement, women’s suffrage movement, or the abolition campaign.  Would change have happened sooner? Thomas Clarkson worked tirelessly to change norms about the slave trade in the British Empire, by collecting evidence and raising awareness that resulted in a nation-wide movement.  If social media was available to him, one can only imagine that public opinion would have shifted sooner, and the complete abolition would have taken less than the 50 years it took.

Today, many government officials have come to embrace social media as a way of communicating with constituents.  For example, the late Pakistani Governor Salman Taseer was an outspoken critic of human rights violations and vented his frustrations continuously using Twitter, which some people think may have led to his assassination.  However, many public officials have yet to embrace this form of communication, but it is picking up slowly.  For example, in the European Parliament, less than half of its members have Twitter accounts.  According to a survey conducted a year ago, 62% of the members had never heard of Twitter, nor intended to use it.

In terms of Facebook usage, the biggest markets outside of the U.S. and the UK are Indonesia, Turkey, and the Philippines. The Philippines is often referred to as the “social media capital of the world”, and ranks fith in terms of Facebook users.  Also, the government is embracing social media, using both Facebook and Twitter.  Just this month, in the wake of the country’s recent flooding, officials are now encouraging the use of social media as a “disaster warning tool.” 

The vast majority of users in these countries utilize social media via cell phones, and not computers.  In India, 600 million people are registered cell phone users with half having access to the internet, while 81 million people are registered users via a personal computer.  Mary McDowell, Executive Vice President of Mobile Phones at Nokia, states that 80% of world’s population lives near a cell phone tower, and therefore the vast majority will access the internet through an affordable handheld device. 

The point is, access and innovative use of social media are rapidly spreading and have an impact in ways yet to be fully realized.  In the years to come no doubt social media will play a more significant role in political elections, advocacy campaigns, and even reforms to say the least.  A media platform that has such a large and diverse user base cannot be ignored.  Thus, how can we not see the value and the future potential that social media offers? 
 

Follow CommGAP on Twitter

Photo Credit: Flickr user L.e.e

Comments

Submitted by whoisbid on
Thank you for the very interesting facts and figures. What is interesting to me personally is business applications and the advent of real time search made available through Twitter. Although it is currently being used as a platform for broadcasting the latest discounts and how you can make money etc, there are some serious businessmen using the tool in the hope of reaching out to potential clients. I believe it won't be long before we see an even more advanced filtering system that will enable more relevant realtime search. Coupled with the popularity of the "short url" services (even Goo.gl) will it mean the beginning of the end of a devaluation of domain name worth and traditional search engine popularity?

Submitted by Matt on
as well, I believe the crux of the matter lies in the fact that in order to maximize the investor return, these social media companies need to shift their focus to serving corporate commerical purposes... which pulls their attention away from meeting their users (who are not really their customers) needs/expectations and tends to be non-transparent. This inevitably limits the long-term value of any of these ventures as they eventually become just another source of marketing/advertising data/avenues which becomes less interesting to coroporate customers as data stagnates and the user adoption/interest wanes significantly over time as users shift to newer offerings that are less commercially focused. How many dotcom boom/busts do we have to go thru in order to learn these simple lessons? ...finding the balance will be key to sustained usership and profits, which based on progress thus far seems unlikely for Facebook, but no doubt their market dominance should carry them far enough for now. while, I would still agree there is much value to be extracted from social media tools, just like other areas of globalization we need to support social responsibility and ensure we're not rewarding companies with bad practices.

Submitted by whoisbid on
As you have said, I also believe that the hook has already been set and it is just a matter of time.

Submitted by Jay Banks on
I think the main mistake was to allow the investors to participate in Facebook because now they will all have their ideas about the future of the company which will consequently lead to the worse services for the users.

Submitted by Kelle Delane on
Amazing to look back in time of over a year to find this blog subject to a Top 10 rating.

Submitted by Brett on
Having just come across this article, it still resonates. The power of social media continues to grow and it has become integrated with many of our lives. What is changing is the extraordinary ability to be social with people around the globe thanks to the supporting technologies and structures.

Add new comment