Facebook's anxieties since its Wall Street launch last week suggest that we should keep social media in its rightful focus: it's about socializing, not necessarily selling — creating awareness, not necessarily sales. All the people worldwide who head to social sites daily are doing so for updates on friends, acquaintances, and colleagues, not usually advertisements. Rita McGrath a Columbia Business School professor prompts such reflections with a timely piece — "The Billion Dollar Social Media Question" — on the Harvard Business Review Blog Network.
Mistaken notions about social media's Nasdaq heft remind Professor McGrath of the 1990s tech bubble: "Back then," she writes, "we thought that just getting a lot of people to a site was worth something (remember WebVan? Or Value America? Or Pets.com?); today we think having millions of users spending time on a site is worth billions.
"The algorithm we don't yet have is the one that translates time spent on a site into economic returns for the company hosting the experience..."
True enough, but the missing algorithm doesn't at all invalidate social media. Facebook isn't WebVan. Communication channels need to be understood and appreciated for what they are, the relational value they offer, not necessarily the value they may or may not register in a trading pit. Check out Professor McGrath's post.
Doug Bedell has a background in journalism and PR and is the owner of Resource Relations LLC in Central PA, focusing on organizational and crisis communication. He’s the community manager of SimplyFair.net, a social network on fairness. On the Web, Doug’s at www.ResourceRelations.com. On Twitter, he’s @DougBeetle.
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