I found the following post on the LNKD board, posted by redsox2005. I thought it was incredibly insightful and helps explain why I’m not in the wildly overpriced social media stocks.
Saul
"I have been a LinkedIn member since it was in beta. There are a couple of wonderful things about its services from a consumer perspective: if one is looking for a job, certainly helps to know who knows who within an organization. That’s pretty sticky in my mind - but how often is someone looking for a job?
Professional perspective - I am work for a tech company in Enterprise sales. LinkedIn is very useful for introductions to high level individuals versus cold calling. Again - this is relatively sticky.
However - I don’t pay for any type of subscription premiums.
Headhunters Perspective - they use it constantly. What seems to be great for them is a nightmare for some of the professionals. I, for one, am very tired of getting notices from recruiters on some next big thing since they probably sent it out to hundreds of individuals based on a specific query of attributes.
Another key on LinkedIn - most people don’t limit their contacts. Me? I know everyone of my little less than 500 contacts. I can reach out to them and get answers. I do disregard many requests though, and this is not, I believe the typical norm.
I have a FB user ID. I thought it was a cool concept at first years ago and a great way to connect up with old friends. Couple of things on FB though:
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Started getting friend invites that weren’t my friends. People I knew absolutely, but people who were pretty much jackasses back in high school wanting to connect. Interesting that those same people do not reach out to my LinkedIn.
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Do I really need to know that someone is cooking something at 5 and or that it is snowing out? Really - the information is sometimes so trivial.
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Asked my 13 year old if he wanted FB - said no way - no one using it in his class. this might change but they all use Instagram and I think that is what might save FB.
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Twitter - same thing. Do I need to know that someone is tweeting about hooking up at the Olympics? Interesting yes but did I really need to know that, or that someone has tweeted another irrelevant detail on their or someone elses life?
So when I look at all three of the social investments I come to the same conclusion:
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Of the most critical to me, a 40 something mind you, is LinkedIn but I don’t pay for it and sometimes it is annoying.
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Are these fads? Maybe/maybe not - not sure. In 15 years? It could be that none of them have the same valuation as they do today. Or just take FB and multiply a 20% compounded annual growth for 15 years. FB is at $2.6 Trillion market cap, LinkedIn - $354 Billion, TWTR $314 Billion. Will social be the rage in 15 years? Good question and great debate.
But let’s flip it over - what about Robots or Sensors - what will that look like in 15 years? Apply 20% to IRBT, get $18.5 Billion, AMBA, $12.8 Billion, SWIR, $9 Billion.
The above has no analysis really whatsoever - just maybe some common sense. If you had to make a bet; is social going to take over the world or a robot, new manufacturing like 3D, etc? My bet is that social will not grow to those expectations.
Hope this ramble was interesting on a day in the Northeast where it is snowing but didn’t want to tweet it, FB it, update it on Linked In, send it to your work and home e-mail, etc. b/c I think everyone already knows it is snowing.
Sox Nation