Fight or Flight

In his article about the decline of growth in digital media, Ricardo Bilton’s contributors say that 2016 is the year to get out. It’s all about momentum, they say, and once things start slowing down there will be no way out (with a respectable valuation, that is). His article spells doom and gloom for all in the digital media business, but I suspect that it’s a little too soon for the social media conglomerates to play the victim card. 

Jiyoung Cha’s chapter on business models investigated the strategies that social networking giants like Facebook, MySpace, Twitter, and LinkedIn are using to grow and sustain their user base. From the looks of it, they’ve done a good job of bringing something “differentiated, innovative, and attention-grabbing” to the table -- just what Bilton’s contributors say is necessary for them to survive. But I would argue that they are doing much more than surviving -- these social networking sites are thriving. And if these giants are thriving, some one-time competitors are on the downhill slope to extinction. 

Cha notes that many US social networking sites are pursuing an “aggressive international expansion.” My first thought was that some universal social networking site for each niche would be an effective and efficient solution to our problems. You can look one place and find exactly what you need. Every one wins.

However, it’s impossible for everyone to win in that scenario. What about the local social networking sites that don’t have the resources to stand up to a giant like Facebook? What about the market for local goods -- it’s sure to be overrun by the products being advertised on the newly expanded social networking sites. Social networking globalization is not a victimless crime.

In an article in the Harvard Business Review, Niraj Dawar and Tony Frost offer some ‘survival strategies’ for local companies who are experiencing the onslaught of international business into their ‘emerging’ market. The article instructs local business to focus on their niche -- to really invest in the specific needs of their consumers that might easily be missed by bigger companies. 

That all sounds well and good, but if everyone is following the model of the Long Tail that preaches ‘niche niche niche’, how will a smaller company survive? The globalization of digital social networks and advertising isn’t likely to come to a halt soon, so one question remains for all things local -- fight or flight?