Having almost limitless access to information, social networks have outgrown their status of omnipresent information-sharing tools to turn into major players at the investment market
With the advance of mobile technology, competition has become relentless. Are social networks trying, in their turn, to invest the money they once got from brave venture capitalists? Let’s see what the latest ‘smart investments’ of social network companies might be.
The Growing Popularity of Startups
Today, more and more startups get into social media’s radars exactly because they use social media actively to promote their activity and attract potential investors. As long as a startup has a unique competitive advantage and a promising business model, venture capitals will not be late to invest, expecting it to turn considerable profit.
The craze about startups might also be rooted in the fact that the last couple of years have seen the birth of hundreds of startup accelerators. As a result hundreds of startup businesses, even at the concept level, have become part of a thematic driven investment trend, and have begun to considerable raise seed funding.
Social Networks As Venture Capitalists
In an attempt to reinforce their brands and expand business models beyond social media, and pressed by the need to reinvent themselves in the face of a great number of emerging niche social networks, social networking websites, such as Facebook, Twitter, LinkedIn, and Dropbox have begun investing in startup companies.
Mark Zuckerberg’s startup investment practice kicked off at the end of 2013 with seed funding of Panorama Education, a startup company which analyzes data to improve education. He kept acquiring shares in many other startups developing all sorts of products and services such as lifestyle apps, financial instruments, big data analysis tools, virtual reality technology, with Instagram and WhatsApp being just a blip in his investment portfolio.
Keep Your Eyes Out For… Big Data Startups
In the age of Big Data, social networks need to find ways how to process this huge amount of information and use it to profitable or socially meaningful purposes. Acquiring technological startups such as Pryte, Facebook are paving the way to their new model, where they play a serious part in the network society.
Quite like Facebook, which invests across a wide range of industries, driven by the agenda to make the Internet more accessible, Twitter follows suit with startup investments of their own. Swallowing up data visualization startup Lucky Sort last year, and with their latest acquisitions of Namo Media and social data company Gnip,Twitter is also encroaching upon the data listening race, as well as strengthening its positions in advertising and social media.
LinkedIn has also joined the game of Big Data, buying Bright.com, which boasts top-notch data analysis tools and machine algorithms. Not to mention the cohort of great specialists in the sphere of data analysis.
On the face of it, Dropbox seems to be satisfied staying in its comfort zone providing unlimited access to uploaded data for private users and business. However, obtaining Droptalk with its cloud-storage options, Dropbox seem to be making a move towards big data too. I’m very much looking forward to Quora’s first procurement, whenever it happens.
If you think that Apple are lagging behind from the social network buzz, you might want to think again. Apple’s acquisition of Spotsetter last week lets the company offer a product combining social data and maps – a giant leap for its social networking and big data aspirations. They’re halfway there, so, brace up for interesting times.
Last but not least, Google is the all-time champion of swallowing up startup businesses. Since 2001 more than 150 companies, mostly startups, have merged with Google. The global search player now spans across industries, constantly diversifying its investment in all spheres imaginable – from social networking and web search, through e-commerce and mobile to GPS and artificial intelligence. Its latest acquisition of UK retail forecasting company Rangespan along with Google Ventures are perfect illustrations of Google’s ambition to collect and “organize the world’s information”. What they are to do with it, apart from making it “universally accessible and useful” is quite another matter.
So Long and Thanks for All the Fish, Social Media!
Connectivity, mobile technologies, consumer-driven e-commerce platforms, growing access to information and ecological attitudes, if you wish, all call for social media to be even more innovative and open. Social media as we know them will soon exhaust their potential unless they innovate themselves out of this situation, so muscling in on as many data-savvy startups as possible is a must.
On a more fun note, don’t worry for social networks. Your local pub where you mix and mingle with your mates – this, hopefully, will never change.
(Insert: Mambembe Arts and Crafts/flickr)