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December 9, 2024
Social Networks have revolutionized our society: They have changed how we view the internet. Meta (Facebook, Instagram), Twitter, Pinterest, and Tik Tok exceed billions of dollars in worth. So, how can we say that there is something “nebulous” about them? Several reasons
First, it has been an awful year for social networks, as reflected in the stock market. Meta lost 55% in the last 12 months; Twitter lost 43%; Pinterest lost 77%; and Snapchat? Lost 90%. The cause for decline for each company is different, but there are several things in common. First, there is the rise in interest rates: All social networks make their money from advertising, paid by all types of businesses. As interest rates increase, there is a high level of uncertainty in the markets, which makes many businesses cut back on their advertising budgets.
Another factor is Apple’s privacy policy: Apple changed its privacy in a way that makes it harder for social networks to do their thing, which is basically harvesting data. According to Meta, that change alone caused them a revenue loss of 10 billion dollars (Of course, Apple did it because they care about their clients, and not for any other reason).
The third factor is the increasing competition (Yeah, sometimes monopoly companies can feel it too). As of now, Meta and Google control the lion’s share of internet advertising. But, there is some stiff competition expected for many reasons, and stock prices are reflecting it. First, Tik Tok is exploding in popularity and has more than a billion users (Which makes Instagram make a lot of changes to its platform); Furthermore, Amazon made more than 30 billion dollars in advertising made by sellers on its platform. Even Netflix announced they would launch a cheaper subscription plan with advertising soon. Bottom line, several significant factors jeopardize the business model of Social networks.
All publicly traded stocks strive to show growth in order to please their shareholders constantly. Social media stock companies were obsessed with hyper-growth, which caused them to lose value very quickly once shit started to hit the fan. Now the question is how social network companies respond to these changes. The problem is that they are already huge companies, and they can’t just turn into “value stocks”; So, chances are they will try new strategies to gain their power, such as new ways to monitor us and sell us ads. They will increase social tensions in society, deprive us of any shred of privacy we have left, and mix sponsored content with authentic content so that we won’t be able to tell the difference.
This future looks pretty grim, ruled by social media conglomerates. The only way that humanity can prevail is in Web 3.0, Real Web 3.0, which is decentralized and democratic. May we see it sooner rather than later.
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