In November 2006, I commented about eMarketer’s then-projections for social networking revenues. When I wrote that, I said if these figures turn out to be true, then Facebook would be worth $2.275B… by 2010. Read for yourself here. Between then and now, we lost our marbles and [il]logically extrapolated MSFT’s $240M investment in Facebook for 1.6% to project a paper value of $15B for the social networking site, justifying Facebook’s refusal to accept offers ranging from $800M to $2B (Viacom, IAC, Google, MSFT and Yahoo!).
Today, judging by the market for Facebook employee shares, some can argue that Facebook is worth $2B. Judging by the fact that the very same eMarketer has totally deflated its own projections for social networking revenues, that figure is far more plausible than anything near the $15B figure:
That’s right, as a result of user-generated content and social networking sites being totally rejected by marketers, eMarketer earlier forecast of $2.15B by 2010 has been replaced by a more realistic but somber one: a paltry $1.64B by 2013.
It must really suck to be your average, run of the mill VC who expected social networking to “change the world” and make billions. No wonder why they’re frozen into fear and inaction for the bulk of 2009.
You can blame the economy all you want, I blame a lack of common sense.
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WatchMojo NewsletterBefore all of the social media gurus send me death threats, please note the question mark in the title.
In mid-November 2008, we learned that AOL was canning Uncut, today we hear rumors that Yahoo! is killing Jumpcut. This begs the question: is Microsoft’s Soapbox next? All of these sites were either launched (Soapbox) or acquired (Jumpcut and Uncut) during the heyday of User Generated Content-mania, circa 2006. You know, a time not long ago when Time chose YOU as the Person of the Year.
A mere two years later, with marketers firmly rejecting UGC as a viable environment to advertise alongside to, you have to wonder how many other UGC-oriented video platforms will get killed.
After all, Uncut, Soapbox and Jumpcut are units of major media companies and they’re either dead of risk getting killed off.
How soon before VC-backed video file sharing social networks are killed, as well? After all, when it comes to UG-videos, YouTube has that market cornered, and it’s trying to carve out the ad-friendly programming away from the UGCrap to generate meaningful ad revenues… so how long before me-too video sites realize UGC is for losers and their VCs pull the chord?
Hint: not long.
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