Is Social Media Headed for a Downfall?

29 09 2009


The answer is an unqualified “yes” but, don’t hit the Red Button just yet.  A lot of articles have been written about various signs of weakness at social media vendors as many writers want to be the first to predict the downturn.  The fact is that a period of adjustment and a shake-out are normal and even necessary in the lifecycle of any technology.

The industry analysts at Gartner came up with a Hype Cycle for Emerging Technologies to show the historical pattern we have seen for many technologies.  It starts with a period of high growth, multiple vendors and marketing hype, followed by an industry shake-out, and then a final stabilization at a more sustainable level.

Hype Cycle - 1

Here is my take on where we are with some of the key social media technologies that will be important to Enterprise Social Media Marketing.

Hype Cycle - 2

With Social Media, we have technologies at almost every stage of the cycle.

On The Rise

  • We have many technologies on the rise and these have been getting most of the media attention.
  • I would add Internet Telephony and Unified communications.  People do not tend to think of them as social media, but they are rapidly being integrated into social medial platforms.

On the Downward Slope

  • Microblogging may be peaking here.  Microblogging is being challenged by social sites that are adding their functionality quickly.
  • Podcasts are also on the down-cycle.  Podcasts so far have not caught on as much as expected for business use. (See: Why Don’t Your Customers Listen to Podcasts ?)

Finding The Plateau of Productivity

  • More mature technologies that have been used for years by enterprises such as email, vendor web sites and instant messaging are reaching a  sustainable business level.  These technologies are so mature that people don’t tend to think of them as social media, but they serve that function.

Looking at History – Internet Retail Commerce and the .com bust of 2001

  • Year 2000 WW eCommerce revenue was $200 Billion (Morgan Stanley)
  • The following year Internet Retail Commerce crashed, along with the rest of the .coms
  • By 2006 it bounced back to $335 Billion (Tech Crunchies)
  • In 2010 it is projected to reach $711 Billion (Tech Crunchies)
  • The point is the Internet Retail eCommerce actually recovered and surpassed it’s year 2000 levels.  (Using revenue as a proxy for technology acceptance in this case.)
  • Another example is the Java software programming language. It went through a period of over-hype, fell off a bit as it struggled to find its best place of utility in the market, and ultimately went on to be extremely successful and broadly-adopted.
  • Other technologies such as CORBA do not.  CORBA survived, but as a somewhat complex technology used mostly by large service providers.  It never gained wide market adoption.


  • The Gartner Technology Adoption curve accurately predicts the cycle of technology over-hyping, shake-out, and recovery.  We have seen this pattern many times now.
  • In the course of a market shake-out, the weaker companies are driven out and the market consolidates around a smaller number of stronger vendors.
  • Weaker technologies can be shaken-out as well.
  • What is important to remember is that technologies that fill a clearly-defined market need will live on even though the players implementing those technologies may change and consolidate.

So, yes, a shake-out in Social Media is coming.  Nothing could be more natural from the point of view of the technology lifecycles.  The herd gets culled and the result will be fewer, stronger, better-positioned vendors.  The key thing to remember is that Social Media, like eCommerce, serves a fundamental market need.  The specific companies and technology details will undoubtedly change, but the fundamental market need for this technology is there.

Social media enables us to engage in authentic,  two-way relationships between vendor and customer that have never been possible before.  Similarly, social media enables customers to be far more informed about what they are buying and far less dependent on vendors to tell them what is a good product or service.  The market is not going to give up this capability.




2 responses

30 09 2009

Great blog post! I agree with all of it and especially the point about unified communication being merged into the social media landscape. This is well thought out and very informative. Thanks! B.

30 09 2009

Thanks Brian! I had been thinking about writing a blog about how Internet Telephony and UC were going to be a part of social media soon, but I guess the cat slipped out of the bag in this one. Will probably write more on this later.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: