Last week something, two things really, happened that would have sent a frisson of concern through those monetising “Big Data”. First, Facebook shares plummeted on Thursday, wiping more than US$120 billion off its market capitalisation.
Then, on Friday, Twitter lost 15.5 per cent of its market value. The precipitous falls came after both of the social media networks reported user numbers and sales growth that disappointed the market. Both groups rely on a network effect – the more people who join and use their services, the more useful and attractive the networks become to others, creating a virtuous cycle that feeds into the financial metrics in a leveraged way.
Author: Stephen Bartholomeusz