Is there a social media tech bubble?
As I joined the digital & social media industry not so long ago, I’ve been reading many articles regarding the mind-blowing growth of this industry. After LinkedIn’s IPO that valuated the company at nearly $9bn after just one day, I started wondering: how far this will keep going?
I am a social media lover and I want to thank all of these brilliant people like Zuckerberg, Page & Brin or Dorseyfor opening a whole new world. These social media platforms totally transformed the way people communicate together and made the world smaller then ever. And it is just the beginning!
But I want to say that it might be going too far market value speaking. We all remember the Internet bubble back in 2000 when tech companies were valuated over a 100 times their annual revenues. Many investors lost tons of money with this bubble! And not only them, but the whole economy suffered from that tech bubble burst… And even though it’s a very different industry, the 2008 subprime bubble burst made the world fall into the worst recession in modern history.
By the end of this year it is expected that Facebook’s market value reaches $100 billion! That is to say 50 times its annual revenues!
In not a long time from now, we may see a bid change in the social media industry if one of these big companies falls apart…
Share your comments, I would like to know what you guys think about this.