Youngsters and tech savvy enthusiasts join these networks and reunite with old friends, make new friends and discuss on various topics. But after a point in time the interest level in these networks fades away with lesser and lesser visits to these sites. Besides, with so many forms of social media popping up, people tend to join every new available network and ultimately get bored with the whole concept. Also, there is always a lack of quality about what people like and talk about, which leads to declining interests in the sites. Facebook however has stood the test of the times and has come up with newer applications and ideas to keep the interest alive. Film producers and celebrities have used these networks extensively to create an awareness of their products. Biggies like Yash Raj and Subhash Ghai have also joined the bandwagon. But it becomes really very difficult after a point in time to generate the return-on investment & time spent on these websites. Although it is argued that the these platforms need to be looked at as a form of awareness creating platform rather than a return on investment, it does become important for any business to make sure that the amount & time on promoting its product online generates reasonable moolah.
A Social Media Network always does help in forging strong relationships and could be an invaluable tool for a PR firm but it cannot validate the returns on investment. For these reasons it becomes very important to note that the social media networking would soon be forgotten form of marketing and would just become a form of entertainment.
Below are the reasons why Social Media Networking is not a great business to invest in.
It lacks the advantage of getting repeat business.
The barriers to entry in this industry are very low. Almost anyone can start a business around this concept.
Although there is brand awareness, the brands lack well articulated positioning in the minds of the consumers.
Every new form of networking idea can give a potential competition and blow to the existing czars of networking..
One who is involved in the business of social media networking would not be able to increase its pricing for the consumers with rising inflation due to intense competition.
No one knows how this platform would evolve tomorrow and how the technology would change. It is difficult to predict. For example no one knew some years back that blogging would become a potential revenue generating tool and a tool to spread news at lightning speed.