By Tom Still
MADISON, Wis. – Social media has credibility problems … and financial troubles.
The linkage between the two is becoming clearer by the day and helps to explain why industry leaders are scrambling to find business models that work.
Elon Musk’s $44 billion acquisition of Twitter and the resulting swirl of layoffs, increased debt load and likely format changes have attracted the most scrutiny, but the rest of the social media industry has its woes as well.
Musk’s personality and politics makes everything he does seem bigger than a SpaceX rocket, but something had to give with a company that had lost money eight of the last 10 years. About half of Twitter’s 7,500-person workforce may be laid off, users may pay for previously free features, and some major advertisers remain on pause.
There’s also plenty of angst over what free-speech purist Musk will allow (or not allow) in terms of “verified” content. (Just ask comedian Kathy Griffin, who got the boot from Twitter for impersonating Musk online.) Some Twitter-like competitors, such as Mastodon, are reporting a surge in new users that may be linked to that uncertainty.
The Twitter-sphere is not the only social media world spinning on a wobbly axis.
Other social media companies have been grappling with reduced digital advertising this year, in part because privacy laws, policy changes and public opinion have made it harder for those advertisers to target users.
Snap, home to Snapchat, laid off about 20% of its employees in August and recently logged its slowest quarterly revenue growth since it was formed. Snap’s stock price tumbled for much of the year but may be stabilizing of late.
Meta Platforms, the Facebook parent, appears poised to lay off a chunk of its 87,000-person workforce, as well. Meta shares have also fell in the stock market this year but rallied when layoff news broke.
Traditional tech giants are also hiring fewer people these days, if at all. Amazon has paused hiring for its corporate workforce; Microsoft, Google, YouTube, Lyft and other firms not necessarily tied directly to social media are also cooling their hiring paces.
Long under fire for its Chinese ownership, TikTok may now face a U.S. ban over allegations that its China-based engineers accessed personal data on users in the United States and Europe – even transferring some European data to China. TikTok is already the King of Deep Fakes, which is a term for cleverly edited or synthesized material that can be funny but can also mislead people.
Not even Donald Trump’s platform, Truth Social, is immune from challenges. Some believe its conservative users will turn to Musk’s Twitter, and there’s a chance Trump’s $1.3 billion deal to finance Truth Social could unravel if its lead investor is forced to prematurely return money to stockholders.
Meanwhile, Ye, the rapper formerly known as Kanye West, has said he plans to buy Parler, another right-wing social media site. Ye-ikes!
No wonder BBC.com devoted a Nov. 7 story to why many people are turning away from digital screens in what the news organization described as “social media sobriety.”
Why are some people turning away from social media? Reasons cited by experts include privacy concerns; trolling by anonymous haters (the Russians were back at it in time for the election); a sense of wasting time over random toxicity; and even a correlation between heavy social-media use, less sleep and higher anxiety.
It’s important to remember social media only burst on to the scene within the past two decades. Mark Zuckerberg and a few fellow Harvard students started it on campus in early 2004 (late 2003 if you count its predecessor, FaceMash) and it wasn’t open to the public until two years later.
For most of social media’s short history, people seemed willing to trade privacy for free access almost entirely supported by advertisers. The resulting explosion in users across so many platforms may have reached a saturation point as users confront the reality that few things in life are free, and fewer still are free forever.
Still is president of the Wisconsin Technology Council. He can be reached at tstill@wisconsintechnologycouncil.com.
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