Social Network Limits of Scale?

According to the Business Models of Social Networking Sites article, a social media site must have four components in their business model framework. They are: Value Creation, Target Market, Sources of Competencies, and Revenue. When reading this article I thought of two social networks I use daily and compared the two in regards to this framework.

The first is Facebook - the king of social media. Facebook has a net worth of over $100 billion, according to Forbes Magazine, and has 1.19 billion active users. Facebook is continually advancing their technology in order to stay relevant and keep their membership base. I believe their value of creation is unique and that they dominate the field when it comes to social media sites. However, I feel that they are entering a future where they may not be the top dog anymore. Their target model has changed - the largest user group are middle aged adults (in its creation, Facebook targeted college students) and due to the threat of new entrants (i.e. Snapchat) Facebook is looking towards a future without the next generation. Thus, what does this mean for its business model. Should investors start looking for a way out or will their sources of competencies rise again draw in new consumers?

The second is Snapchat. Snapchat is interesting because it is still so new and, in my opinion, at it's peak. It has1.55 billion users, according to Fortune, which exceeds Facebook's count and is valued at $16 billion. I believe Snapchat's success is due to its business model as well as the app's positioning amongst other social media sites. It's technology is unique and the continuous innovations with filters, lenses, and discovery page, keep users continually entertain and excited. Furthermore, Snapchat's largest users are younger millennials which gives them an advantage over snapchat because they are more likely to grow with the app (similar to how Facebook's first users grew with it). However, with shorter attention spans and the constant need for new, snapchat does face the reality - and challenge -of the younger millennials moving to something else once their bored with the app.

Both networks, regardless, face the question if the digital media world is sustainable. We see now that it is profitable - but it that true in the long term? Honestly, I think the question is unanswerable. We are still in the beginning ages of the digital media world and have cannot make true assumptions on if they are are sustainable or not.