Why I Won’t Invest in Social Media

In theory, I would like to invest in social media. As social media companies strive to make money in a shifting marketplace, I can’t help but wonder where this is going. I have been around long enough to know that people get really excited about certain stocks, only to cast them aside when the next big thing comes along. At the same time, I hate to be so conservative that I miss out on an opportunity to get in on the ground floor. Regardless, I can’t quite bring myself to jump in. I still won’t invest a great deal in social media. 

To be frank, investing in social media is not considered to be a welcome prospect by many, atleast not in current times, despite its universal outreach. I, myself have been advised against it by many friends so right now it is difficult to say anything about it. To be on the safer side, I want to buy instagram likes from real people and active people as they only include friends but still the organic count would take a long time to grow. Therefore, I am confused on what to do at the moment.  

Which one? 

What I am stuck on is picking the right company. Do you go with the well-known and established social media company? Or, do you go with the fledgling entity that has yet to realize their full potential? This is the quandary of all investing, but with social media it feels particularly volatile. Life may be like a box of chocolates, but social media is a very large box of chocolates. 

The evolution of the Internet 

We have seen this movie before. At least, we saw this movie a few years ago before the technology changed. The Internet is an amazingly powerful tool, but it is also terribly unpredictable. Did anyone imagine the impact of social media just a few years ago? That is part of the reason that I am hesitant to invest. I fear that as soon as I buy stock, everything is going to change. 

Some thoughts on investment

If people do think about investing in social media, I would have this advice: 

  1. Think about what this company does. In other words, what is their product? Obviously the appeal of social media is that these organizations attract large quantities of people. However, once those people are gathered, does the company have a mechanism to make money from them? This can be a complicated answer, and one that investors need to answer.
  1. Think about the future. Clearly no one can accurately predict the future, so stock speculation becomes educated guesswork at best. The point is that potential investors still need to think about what a social media company might look like in one, two or five years. Will they be as popular? Will they be bigger? Or, will they be yesterday’s news because something even more exciting just arrived?