Are we there yet? Facebook and the next big thing.
I’ve enjoyed reading lots of the analysis out there about Facebook and whether or not their attempt to buy Snapchat is a sign of desperation. Reportedly, an offer of three billion was made by the company and rejected by Snapchat ‘s young leadership. Everyone immediately said Facebook was doomed. Now, snapchat has been hacked and Instagram Direct is trying to fight back, under its new parent of course, Facebook.
A few quick thoughts :
1) I cannot begin to imagine the conversation where I decide to turn down 3 billion dollars but I can understand why snapchat would do what they did. It is entirely possible in this rapid change environment that investors would place value on snapchat that is comparable to the value placed on Twitter . Now, to be clear, I do not feel that the value on Twitter is appropriate nor do I feel that investors would necessarily be making the right call to place such a value on Snapchat. That said, whether you believe it to be a bubble or not investors are putting a significant premium on social media applications, especially those that are highly focused on mobile.
2) Facebook is falling into the trap of many large companies. It is scared to let go. In today’s hyperpaced communication overloaded society, users will flock from one platform to the next with little transition time or switching costs. Perhaps Facebook Inc strategy should be to intentionally kill Facebook.com. Build the tool users will go to after Snapchat loses its luster. Building for the future almost means building amazing, but disposable, products for today. This is more than just pushing video ads to mobile phones. If they are good, they should be able to churn out new products and services much faster than competitors. If not, they will cease to be relevant like MySpace before them.
3) Some people are arguing that instagram, including the new instagram direct functionality, are Facebook’s answer to snap chat and their way of the remaining relevant for young people. I’ll offer an alternative theory. The reality is that, like Microsoft has done several times in the past, Facebook bought the popular photo sharing company because they thought it was the next big thing. But was it really the old next big thing? Facebook may have become the “late to the party” juggernaut that it would never have desired to be. Just as the lucrative 18 to 25 market has been leaving Facebook in droves, the same market will begin to leave instagram. Watch TLC, Bravo, A&E, and CNN and note how often they reference Instagram. Face it, when people over 35 start to use something, their children stop.
The bottom line is I don’t necessarily believe the Facebook is in its final days. I do believe, however, the company must drastically rethink their strategy and consider alternatives for growth in the United States. If they truly believe that growth in other markets will counter dramatic drops in USA, I believe that is misguided. Other markets will eventually follow the same path of the United States. Younger users will leave; older users will join the platform at a much lower level of engagement; upstarts will create the next next big thing and advertisers will be tempted away.
For now, I have sold my Facebook holding and bought a small Twitter holding so I can enjoy a brief ride on the wave of the current big thing. And I patiently await the next next big big thing. Oh wait! There it is….
Note: I am sure there are lots of Facebook fans out there that would tell me that I have lost my mind and perhaps I have. But, of course, I’ve heard that before. Post your comments below. I would love to hear from you.
Be Well. Lead On. And may the consumer be the ultimate victor of these fantastic #techwars.
Adam
Adam Stanley
Adam L. Stanley Connections Blog
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