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When you’re hot, you’re hot. Until you’re not.

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When you’re hot, you’re hot—but when it comes to technology, don’t expect the honeymoon to last.

Twitter and Facebook should take a lesson from MySpace: Sell when you’re hot. The media spotlight and the technological/interfacical advantage won’t last forever.

A couple cases to back me up on that:

  • Remember eBay? I know GM wants to start selling cars on there…but traffic (no pun intended) to the site keeps falling. In fact, it’s dropped 32% over a year ago. Part of that is probably due to the economy, but when was the last time you found a good deal—and bought something worth more than a few dollars on the site? When I thought I had, I found out I’d been had.
  • Remember when MySapce was the coolest thing ever? Then Facebook came along. Now MySpace usership has capped off at ~125 million and Facebook doubled to 200 million in one year. Then there’s the fact that they just laid off 30% of their workforce. And while MySpace is still bringing in more advertising dollars than Facebook, their revenue is expected to drop this year as Facebook’s climbs. How long will MySpace hang around? I don’t know, but I’m pretty sure it’s no longer an appreciating asset.

Remember when Facebook was offered $1.6 billion by Yahoo? They should have taken it. Facebook isn’t going to be the latest and greatest forever, and when that’s discovered, they won’t get that 20 billion or whatever it was Mark was looking for (latest I saw was a 3.75 billion valuation).

So what I’m saying is Facebook is great, Twitter is awesome. But when someone offers you billions of dollars for a few years of work…you’re usually the one getting the good deal. Take the money and move on to the next project. It’ll probably end up being the next big thing that overtakes your last big thing.

Agree? Disagree?

The New York Times reported today that Facebook investor Digital Sky Technologies is offering to buy shares at $14.77, valuing the company at $6.5 Billion. Adam Ostrow pointed out on Mashable that the valuation puts Facebook ahead of CBS in value. If that’s what people believe, now seems like the perfect time to sell.


1 Dave { 07.13.09 at 11:15 am }

Amen to that. UNLESS…Ol’ Zuck thinks Facebook is going to be a serious challenger to Google. Thoughts?

2 Brett { 07.13.09 at 12:03 pm }

A serious challenger to Google…let’s see…

In the search business? No, I can’t see Facebook really competing. Twitter I think is way ahead of Facebook in terms of live search and information dissemination. But I use Twitter more, so I might be biased that way.

In the sense that Google as a whole is in the business of advertising (which is what I think you were saying), I can see the point. But if you’re looking at advertising from a campaign perspective, aren’t they both necessary pieces of the pie?

I don’t see Facebook getting deep enough into networked search-relevant text ads, and I don’t see Google supplanting Facebook in terms of social behavioral marketing (beyond capturing web history and email content data…which I think most people find creepy).

I guess the question I’d ask is whether one piece of the campaign pie is bound to take over the other, or will they both retain their value in a balanced marketing plan?

Google looks like they’ll be the king of search and SEM for some time (despite Bing’s best efforts), and their advantage and adoption in that area is so huge–almost a standard for marketers–that it will be years and years before anyone has the capability to seriously compete with the value they offer searchers and advertisers. Not to mention that Google is one of the only companies that you see constantly pushing the boundaries of what can be done in every corner of the web.

Social networking, on the other hand, seems highly fragmented and fickle. Facebook only had to introduce a better interface and a certain level of distance from the trashiness that MySpace started to represent, and migration was fast.

The simplicity of Twitter has probably ripped thousands away from Blogger (and other blog services aimed at the casual blogger) by enabling people to get their thoughts out in a more succinct and effortless way. And I’m willing to bet that there are more than a few who will find it an agreeable alternative to Facebook as well.

Alright. So will Facebook become a serious challenger to Google? Not before the next hot web property comes along and beats them to it. And when that happens, the ad revenues–along with the user base will erode. Again, see MySpace.