COMMENTARY | Social networking remains a powerful influence in today's society. The media coverage of the Facebook IPO demonstrates that social networking sites and companies are potentially forces to be reckoned with in the investing world, both now and for years to come. I am certainly a consistent user of social networking, and I predict using various sites for the foreseeable future. However, Facebook, Twitter and other sites have not taken over the world just yet. Should I invest some of my money in companies that provide social networking? Frankly, I am a little unsure.
Pleasure, or business?
Social networking is certainly a helpful way to connect with other people around the world. I don't know if I would have communicated with certain people from my past without particular websites. In some cases, I don't even email people anymore. I just send them a Facebook message. Also, social networking can be a very helpful way to quickly promote content to a broad audience. There is great competition on the Internet, so social networking sites are often needed if people are going to stay ahead of the technological flood.
What do you produce?
Of course, there is some societal hesitancy about certain companies, and I can understand the concerns that people have about social networking. Various sites make their money with banner ads, and the idea is that you advertise where the people hang out. This makes sense from a business standpoint. In the modern age, commercial success is often about having a web presence. However, I don't know about the upside of social networking sites. Do people buy things through website-based ads on popular sites? Or is the advertising subtler, and do consumers make purchases after continual exposure to images, logos and slogans?
Once, social networking did not exist
I am old enough to remember a time before the Internet and before social networking. For the time being, I have to assume that social networking is here to stay and that there is room for expansion in various countries around the world. However, it is hard to say whether investing in various companies is a wise choice. Some of the most popular sites will not necessarily be around forever. Technology companies have risen to great influence, but have not always maintained their impact. This may be a moment to capitalize on a bright future, or it may be that some of these companies have already hit their peak.
Such are the challenges of speculating on the future of certain industries.
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