I’m keen to understand how the global recession is impacting social media and particularly the North American powerhouse, Silicon Valley. I’m interested in the develpments occurring at Silicon Valley mostly because today we can consider it the backbone behind a lot of the big Web 2.0 companies.
Belts seem to be tightening in all industries across the board – banking, automotive, retail and so on – yet we’re still seeing big injections of capital in many of the Web 2.0 companies.
Take micro-blogging service Twitter for example. It was announced this week that Twitter has managed to raise $35 million in venture capital in spite of the challenging economic climate. This capital has come from Institutional Venture Partners and Benchmark Capital.
Are venture capitalists finally seeing the real value of Web 2.0 in helping deal with challenging times ahead?
I think that social media will come out on top in these tough times as people start using it as a means of cost-saving on entertainment. This is especially important at a time when people are becoming increasingly budget-conscious and are rather choosing to bunker indoors and save their pennies.
I’m a good example of this. I seem to find myself on fewer outings to the movies and instead I keep my cinema experience to my lounge room with my LCD TV, entertainment system and complete surround sound system. In fact, I can’t remember the last movie I saw at the cinemas but I could rattle off at least five DVDs that I have watched at home. I also spend less time travelling and more time talking to my friends overseas via Facebook and Twitter.
There are a plethora of online technologies and digital devices out there that provide consumers with their own portal to entertainment. Aside from big screen TVs that bring you a cinema at home, there are also notebook PCs to consider.
Notebooks are another means of cost-effective entertainment to online services such as online gaming, online video, video conferencing and instant connection to friends and family via IM, social networking sites, email or Skype with those embedded with broadband solutions.
Interestingly enough, consumer experts are also already tipping that many Australians will use the planned $950 Rudd Government cash handouts to splurge on games and gadgets, following record spending on electronics last year (as reported by the Courier Mail).
I’ll be watching these developments closely but please feel free to share any information specifically around how you think social media will fare in light of the global recession.
PRWeek is turning 10 in the US and I was asked to write a brief post for their blog. You can find it here. Below the ”longer”, original version.
Happy birthday, PRWeek!
I first arrived at Silicon Valley 10 years ago, almost to the day. Most people were still using Altavista and Netscape. The word “social” was rarely used, and never before “media” or “networks”. But at every Starbucks – from Santa Cruz to Pleasanton — everyone was talking about the next big thing. Everybody had a business plan. Everyone was able to “get funding.” Companies were changing their names, often adding a .com to the brand so their valuations could go up. Apple was launching the iMacs, then the iPod. It was “boom” time. Things were crazy. I had just arrived from Italy and my country had never seen such madness, at least not since the Renaissance! (we would a few years later, with the World Cup in 2006.)
Most of the PR professionals I knew left their “boring” corporate or agency jobs to join a dotcom. The mirage, the hollow promise of becoming an instant millionaire was just too tempting to turn down. I was new to this market, loved my job, and was not interested in putting it at risk. And then, the bubble burst. And were in the middle of it. People who a few months earlier had left to get rich were calling me to get their jobs back.
What did we all learn? The strategic importance of PR during a downturn. It can help companies gain market share and end up much stronger than before. From an agency perspective, obsessive client service and compulsive focus on your talent base – all these things helped us get through that difficult time. And they’ll help us again.
And at every Starbucks now, I still hear about innovation, about the next big thing. The difference is that now I’ll tweet about it before draining my coffee cup.
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Behind The Scenes: Ogilvy PR, Washington, D.C.