Expect to see three waves of social media. You couldn’t miss the well-publized first wave, a massive move to social networking sites.
Twitter gains 20 million subscribers with the blink of the eye. Facebook’s followers outnumber many countries.

Spreading the word ...
The next question became can they make money, and will business support the business models of Twitter, Facebook and LinkedIn? On the eve of an initial public offering of stock in LinkedIn, plenty are listening to the LinkedIn story. In fact, LinkedIn has been revalued at $4 billion. So, you could say LinkedIn is expected to make a big splash when it appears on market Thursday. So far, indications are good that social media will be well-subscribed. Chinese company Renren shares debuted about a week ago on the New York Stock Exchange, rising more than 40 percent before dropping. Renren is the Chinese version of Facebook.
Monetizing social media is still a question as the stock rolls out. Facebook claims it had gained $2 billion in revenue. About a week ago, the Wall Street Journal declared that corporations are now taking social media seriously. In an article headlined “Business joins the party,” the Journal observes that website traffic is getting upstaged as millions swarm to social pages. Notably, Coca Cola counts a mere 270,000 at its web site. Compare that impressive number with the 22.5 million that find their way to the soft drink company’s Facebook page.
Acknowledging that there might be something to the social media phenomenon is one thing. To say that the corporate world is not comfortable yet in making the transition to social media would be putting it mildly. The initial concern was whether corporate culture and social media would mesh. Some companies, however, are finding that resistance is coming from a surprising source.
Three obstacles to social media marketing:
- Comfort level. Employers may be ready for new concepts in marketing, but their employees are drawing the line when it comes to inviting the company onto their Facebook page. With all the firings that have been well-publicized is anyone surprised that some are balking at letting the boss visit?
- Staffing challenges. Companies have found that bringing in an intern to handle a responsibility of such large proportions as communication was a bad idea. The young set may be less expensive and more comfortable using social media, but that comfort does not necessarily translate to good communication.
- Legal obstacles. Drawing the line on how social networking can be used by employees is proving challenging for employers, too. Lawyers have weighed in and noted that blanket policies likely will not pass muster in courts. As these incidents grate on the nerves of employers, sometimes resulting in firings employers suddenly have been confronted with attacks on their brand from within. Dominoes has a more famous case where employees put food safety under the spotlight in an ugly prank that went viral on YouTube.
And nobody has forgotten that social media is a two-edged sword. It can be turned against brands, too.
Domino’s quickly fired pranking employees, turned them over to authorities and mounted a video of their own on YouTube to address concerns about food safety. The store where employees videoed their antics was shut down for a floor to ceiling scrub down. And, an apology was quickly presented from Domino’s president Patrick Doyle.
A few years removed from bad YouTube experiences, social media are hip and crackling with lively talk. Twitter might have cemented its importance in media with the story of bin Laden’s death that went viral before the president could get to a microphone and address the nation. Everyone from the local microbrewery to real estate agents is jumping on board.
The appeal for business is clear enough. CityGrid Media says more than half of consumers consult websites before determining where they will shop. Considering Facebook is edging out web sites and it’s reach – reported to be 500 million users – the projections might have to be revised. Some are expecting social media ad revenue to eclipse $8 billion by 2014.
That might be the year when we can comfortably declare a third wave of social media: Corporations will have come to depend on it. The day social media becomes entrenched enough in corporate culture and the all-important bottom line – that is the day it can be said social media are here to stay. Starbucks provides one model of a company that has adapted, embraced and has come to rely on social media. Starbucks is followed by 1.4 million Twitter users. More than 21 million like the Starbucks Facebook page. That translates to a lot of lattes.
Speaking of froth, some in financial circles already are saying social media has reached the bubble stage. In other words, they’re not expecting a repeat of Google’s phenomenal run that saw its IPO soar to higher prices. The pundits are saying that investors will not bid up the price to the 50-times earnings mark that Google achieved at its peak. We’ll get a chance to see.
Follow author Raymond Alvarez – @NextwaveRay on Twitter, Facebook and LinkedIn.