Social Media
Introduction
Social media is
"...global, open, transparent, non-hierarchical, interactive, and real-time..."
Soumitra Dutta, 2010
Initially the Internet
"...Gave us a place to be free, to find communities and like-minded people that we may not have encountered in our everyday lives. Today, the Internet still stops us from feeling lonely, brings us new friends, relationships and love affairs..."
Fern Riddell 2018
"...We work in a world that is transparent, with fewer degrees of separation, and where people want a faster response..."
Greg Savage, 2013
NB 75% of "C level" (chief executives, chief financial officer, chief information officer) are active on social media (Fleur Anderson, 2015)
The Internet has allowed the development of social media capabilities via online communities, such as social networks (Facebook, LinkedIn, Twitter, YouTube, MySpace, Skype, Blogs, Yamma, etc), blogs, wikis, web pages, etc.. These have resulted in
- establishing multi-faceted collaborative relationships, such as advanced online social network for patients with particular chronic diseases (Patientslikeme)
- enabling rapid calls to action around common interests. Hundreds of thousands of people can be mobilised in a few hours.
- create and disseminate knowledge rapidly with filtering tools able to authenticate the information
- provides valuable rapid feedback
- change of power relationship from expert to community as more information is available for the community
Many people are spending up to 1/3 of their time on social media. It is estimated that around 50% of Australians shop on-line for some of their needs (SBS News, November 2013)
In UK, people spend 128 minutes a day on their smart phones
. Business model is changing to "Clicks" from "bricks/mortar"
. The Internet
- added communications to computers
- allows for faster exchange of ideas
- provides alternative meeting places to public spaces
US Securities & Exchange Comm. allows firms to release their financial results on social media like Twitter, Facebook, etc
Some social media valuation (The Lex Colummn, 2014d)
. Snapchat (US$ 100 per user)
. Twitter (US$ 74 per user)
. Facebook (US$ 150 per user)
Amount and/or percentage of revenue spent on R&D (2014) by social media groups is
. Microsoft (US $ 12 b.)
. Facebook (18%, ie US $ 2 b.)
. Yahoo! (25%)
. Intel (21%)
. Apple (US $ 6.04 b.)
. Google (US$ 10 b.)
The % of ASX 100 Australian companies that use social media (AFRBoss, 2015a), eg
i) Twitter
- 72% have Twitter accounts
- 34% tweeted their financial results
ii) LinkedIn
- 82% have LinkedIn accounts
- 39% publish their financial results on LinkedIn
The top 11 users of social media are Wesfarmers, BHP Billiton, Rio Tinto, Lendlease, QBE insurance, Telstra Corporation, GBT Group, Aurizon Holdings, Fortescue Metals Group, Treasury Wine Estates & Downer EDI.
Social media has a mixed impact on employment. In some cases it reduces employment opportunities like
- Facebook employs only 5,800 people for its 1.2 billion users
- Twitter employs under 1,000 people
- Instragram started as a photo sharing app and was only 18 months old before Facebook purchased it for US $1 billion (2012); it employed 16 staff. Compare this with Eastman Kodak which was founded in 1880 and directly employed 145,000 people at its peak. It went bankrupt a few months before Instragram was sold. Instragram has 130 million customers
"...Kodak experienced a loss of US $10 million between 1996 and 2001 after failing to change its business and incorporate online and digital technologies..."
Fiona MacDonald, 2013
On the other hand, some of the start-ups created new jobs & endless opportunities for new products &/or services, eg
- Etsy (on-line marketplace for home-made goods - has more than 1 million stallholders)
- eLance (free-lancer contractor site - 2.3 million members)
- oDesk (free-lancer contractor site - 4.5 million members)
- Business model - with the Internet it is changing from "bricks/mortar" to "Clicks"
- The Internet added communications to computers & allows for faster exchange of ideas
"...Technology is often the catalyst for upheaval and job destruction at established companies, but it is also the secret to the success of entrepreneurs launching new companies and creating jobs..."
Tony Boyd, 2014
NB No all start-up are successful, eg in China there are more than 1,000 start-ups launching every day!!!
More on impact of internet on employment. Technological unemployment = where innovation destroys more jobs than it creates
A McKinsey study (2011), found that over the last 15 years, the Internet had created 2.4 jobs for every job lost. Similarly, technologically-driven productivity is compatible with rising employment. In the USA more than 2/3 of the years since 1929 have seen positive gains in productivity and employment.
It is not just the routine clerical or repetitive tasks that are being automated, eg lawyers are using text-mining techniques to read thousands of documents collected during discovery.
Also, 1/3 of the new jobs created in the US over the last 25 years are new like computer programmers, computer systems analysts, fitness instructors, medical technicians, etc
On the other hand, the nature of employment is changing, eg pilots are only actively steering an aircraft for up to 7 minutes in any flight, with autopilot guiding the rest of the journey. There is an increasing trend for less full-time work and more freelance. This is demonstrated by the increasing online talent platforms like TaskRabbit and Upwork; they have created online marketplaces connecting some 4m. businesses and more than 9m. freelancers in 180 countries (2015)
It is estimated that up to 45% of work activities could be automated by using already known technology (2015). This will involve transforming entire business processes and redefining jobs performed by people like our bank tellers job has been redefined by the ATM.
The labour market has become "bifurate", ie menial low-paid jobs at one end and high skilled, high wages at the other end. This economic divide will have important socio-political consequences.
One of the challenges is preparing for future jobs (eg in idea-intense businesses such as media, pharmaceuticals, IT, finance, etc) that offers people rewarding, continuous work as industries change and adapt to external forces.
The idea-intense sectors are accounting for around 1/3 of profit generated by Western companies (2015); this is up from 17% in 2000
Some Social Media Network Sites
(source: Tony White, 2012)
The market capitalisation of the social media sector is several hundred million dollars (2014). Silicon Valley (USA) is the dominant centre for this activity owing to its access to capital and large number of engineers/science graduates (including graduates from China and India). Foreign graduates have launched 1/4 of the new high-tech companies in the US during the past decade.
US venture capital has invested around US $12 b. in the last 15 years into Internet-related start-ups. Yet around 90% of the new ventures fail. There are 4 successful models:
i) Marketplace (a platform where supplies of goods or services like books, consumer goods, car rides, takeaway food, professional services, money transfers, etc, can offer to sell them and advise where consumers can acquire them. Examples include Amazon, eBay, Uber, etc. It is important to gain market place scale. Once a certain size is reached, ie community of users, it becomes self-sustaining. They are effectively middlemen, ie taking a cut on each transaction they facilitate)
ii) Advertising (examples include Facebook, Google, Twitter, etc. They need to have an incredibly vast scale to survive, eg Facebook with nearly 1 b. people around the world logging into Facebook each day. This means Facebook has an almost unlimited ad inventory, driving down advertising rates for everyone else. Also they have the ability to sell more targeted ads, owing to their accumulation of information about your preferences, etc)
iii) Software (requires a level of exceptional technical expertise, ie the ability to code)
iv) Reverse roll-up (set yourself up to be acquired by a larger competitor, investor, etc. You need to create something that is seen as a threat to a dominant player. For example, Instagram which was acquired by Facebook in 2012 for US$ 1b. with an estimated 30 million users & a dozen employees but no revenue)