JIVE, Facebook Failing at Profiting off Social Networks

Both Facebook and Jive seems to be failing at profiting and creating businesses out of social networks. It’s either they are failing at creating businesses, or the business hype for social networks is so enormous that valuation is so far and high in the sky that it is impossible for these social giants to even meet expectations of share holders to get proper valuation. I claim that these companies are not failing and that it’s simple unreasonable expectations by shareholders expecting to reach the new “Google.” There will be value in these companies, they just need to be transformed first.

Why do they look like they are failing? Well, Facebook opened their IPO at $38, which quickly ran up to $45 and today sits at $19. We have seen Facebook literally lose half of it’s value in less than a year. Jive on the other hand, is the enterprise social network, attempting to attain the internal enterprise market place of corporations. At about 2.5% of the size of Facebook, we see a similar pattern, where JIVE had a stock price of $28 and is now sitting at $13, way more than 50% of it’s initial value over a year duration.

The one company that seems to actually be doing it correctly is LinkedIn. At about 25% of the market value of Facebook, $11B compared to $41B, LinkedIn is actually the only growing company of the social networking companies out there. By use of premium memberships and focussed on professional connections where your job and your social networking can get you contracts, sales, marketing deals, campaigns, employees, or even your own job, LinkedIn is cashing in on a very lucrative sector of social networks.

Imagine if Facebook had premium memberships that would allow you to get rid of all the Ad’s out there. This membership would clean up all the spam and protect your privacy from those who you never want to see your account, with pin-point accuracy. Even if 5% of Facebook users decided to pay an optional $5 / month fee, you would see some amazing things out of that company. Facebook has to learn how to capitalize… Jive seems to be in the same boat. LinkedIn, you are doing a great job. Way to jump ahead of the trends.

About Phillihp Harmon

I'm Phillihp. My name can be spelled the same way forwards and backwards, so can my posts... if you wish. I'm out here exploring, learning, and sharing what I find. This is more for fun and personal growth, I aim to be as consistent as possible, so check back daily!
This entry was posted in ***, Facebook, Internet, LinkedIn, News, Stock. Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *