I fully expect the next year to be very grim – and that will impact the social media sector as much as everywhere else, maybe even more. Time Warner’s announcement yesterday of a $25bn goodwill writedown was partially attributed to slowdown at AOL and we can expect more news like this.
The chart shows that the percentage of people who are engaging with social media is increasing – across the board. More people are actively creating (bloggers etc.), more people are commenting, and so on (you can find the definitions of each category in the presentation behind this link). Perhaps the best stat is the one at the bottom – the number of ‘Inactives’, that is to say people who don’t engage with social media at all, has fallen from 44% of the US population in 2007 to 25% in 2008. Just about everybody who is online now interatcts with social media in some way.
In summary the message here is very clear – engagement with social media is increasing rapidly.
Shifts like this lead to value shifts and hence value creation – every time. It might not be this year, and the monetisation mechanism may not yet be clear, but it will happen.