Is social media coming off the boil (a pretty ferocious boil admittedly) for big companies?
New research from Social Media Influence shows that the number of top 100 Fortune 500 companies Tweeting regularly (ie at least once a month, which isn’t that often) has remained static at 25 in 2011 over 2010, and has fallen from 39 in 2009 when companies decided they needed a Twitter account (or their agencies did).
And Facebook has announced that its revenues dropped for the first time over consecutive quarters, falling nearly seven per cent to $1.06bn in the first quarter. Year on year, growth slowed from 55 per cent in the final months of 2011 to 45 per cent in the first months of 2012. Net income (profit) fell 12 per cent, from $233m in the first quarter of 2011 to $205m for 2012, all this despite growth in users to 901m.
It’s not hard to see why so many giant companies have Twitter accounts lying around that they don’t use: the gains from Tweeting (such as they are) can easily be outweighed by one that backfires and has other Twitterers jumping on your back. And, given the amount of effort it takes to get a meaningful statement out of any big company these days, it’s hardly likely that most of them will produce anything pithy or interesting in 140 characters or less.
But corporate disenchantment with the social medium (if such it is) is bound to impact on Twitter’s chances of one day launching itself on the stock market at a humungous valuation.
Talking of which, Facebook is no longer worth the $100bn mooted when it first announced its plans to sell shares via an IPO, scheduled for the end of May. It now thinks it’s worth a mere $77bn according to the valuation used when it paid $1bn for photo-sharing app Instagram earlier this month, $300m of which was in cash and the rest in Facebook shares.
News of the first quarter revenue fall won’t help its valuation. Facebook blamed the unexpected reverse on the effect of post-Christmas spending blues by big advertisers, a rather old-fashioned excuse for such a go-go company, plus a leap in expenses (not including the Instagram purchase).
But, as with the fall in the number of big company Twitter users, Facebook’s travails may reflect the rather harsh reality that big bad companies expect hard results from their social media commitment.