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What does Facebook’s IPO performance mean for the future of social media?

2 min read


SmartPulse — our weekly nonscientific reader poll in SmartBrief on Social Media — tracks feedback from leading marketers about social media practices and issues.

This week, we asked: Facebook’s sputtering IPO …

  • Raises valid questions about the monetization of social media: 50.49%
  • Was simply a poorly managed IPO that is not indicative of anything: 49.51%

A real nail-biter this week, with the SmartBrief audience nearly split on what Facebook’s initial public offering means for the future of social media. I think the answer comes down to whether you think the future of “social media” is synonymous with the future of Facebook — and how you feel about the monetization of social networks.

I take a little heat sometimes for how Facebook-heavy the daily SmartBrief on Social Media newsletter can be. I could make excuses — but generally speaking, it’s fair criticism. Facebook is not social media. Social is an idea about the way we talk to one another that’s bigger than any one piece of technology. Of course, the other side of the coin is that there’s no social media without these tools we’ve all come to rely on. And for networks to be sustainable — reliable, scalable and constantly evolving — they must be monetizable in the long term. So the ability of Facebook to become a sustainable business is important for the future of all social networks. If Mark Zuckerberg fails, it’ll be that much harder for the next guy.

That said, Facebook’s less-than-meteoric performance might have a significant silver lining if it indicates that the market is becoming more realistic in its expectations for the business potential of social media tools. If Facebook manages to calm the waters and then put itself on the path to steady, reasonable growth, it could be the best thing for the industry at large. You need investors to be willing to fund great ideas — but you don’t want them so frothing at the mouth for the next hot IPO that they throw their money at anything, the way they did in the late 1990s. Building an ecosystem that supports social tools for the long haul means having a clear-eyed understanding of the role social networks will play going forward: important, but not the alpha and omega. A marketplace that takes challenges ahead seriously while still being willing to invest in social media companies might be the best environment for long-term social media innovation.