Layoffs in the Social Media Space

Since arriving in the Bay Area, I've been amazed by the power of the echo chamber to drive money into online properties that lack basic revenue models.

The social media space has also spawned properties attracting small to large audiences, but which have failed to monetize their promise.

Unfortunately, reality bites. And the days may soon be gone when fancy ideas that take years and tens of millions of dollars to prove their value are monetized because of big shot founders.

It will be sad to watch your list grow, but I feel it will all shake out for the better.

My advice to those who have a solid business and revenue model: now is the time to use smart, strategic PR and marketing to race past those of your competitors who sit idly by. Now is the time to accelerate your game.

It ain't business unless you can make a living doing it - who pays your bills matters. Innovators will always innovate but with inherently risk-averse entrepreneurs doubling down on that which cannot be known, government & investors should spend more time & effort lowering the barriers to business creation.

Not sure if there is any more advantage than encouraging people to try again - and making it possible to equitably do so - angel investor? strong intellectual property laws? properly priced bandwidth? more support for tye narrative of small business by those who better - including lip-service paid - pols? Bet a combinstion of all of the above.

Capitalism means money has a choice in how & with whom it capitalizes // energizes.

Most social media companies would not be profitable and this is likely to lead to more layoffs. Colin Browning has an interesting poll on the same:
http://constructingsocial.com/2008/09/financial...

Traffic doesnt equal revenue...ask facebook. For those looking, I still see thousands of jobs posted on employment sites.

www.linkedin.com (networking)
www.indeed.com (aggregated listings)
www.realmatch.com (matches you to jobs)

good luck to those searching for jobs.

Wrote a piece on what will happen with social media in recession in a blogpost today orginally published as a debate article in Sweden this week.

One part covers the coming layoffs...."Social media requires time and this is a possible intriguing interplay between the effects of recession and yet another example of how social media can change roles within a company. With harsh cuts in market budgets, it will be difficult to have all marketers remain. At the same time, it costs a lot to sack employees. We suggest to use the marketers for the company's brand-building by letting them carry out the dialogue with consumers in social media. It also creates an opportunity for companies when the next boom comes to have a significantly higher knowledge and presence for the brand among consumers—and this for a cost-optimized use of the human capital that the company already has. Can it get any better?" Read the full post here: http://linkslash.com/c98a78

Written together with Niclas Strandh aka deeped a social media strategist colleague.

You are one of my gurus Jeremiah . . . I do mention you a couple of times when having social media courses in Sweden on a weekly basis. "Go fishing where the fish is" and the possibility of making "inflight corrections" are two of my favourite quotes from you :)

Thank you for all the inspiration you give!
Brit

Brit,

I'm honored thank you!

There are jobs posted in the Comm Mgr Facebook group also. The last 3 posts are by org's looking to hire (including Facebook).

It will be interesting to see what happens in the industry. Online marketing is an area that sometimes heads upwards because costs compared to offline are usually much smaller.

Two things here:

First off, a question for you, Jeremiah. We've been expecting a pretty standard natural cycle of proliferation followed by consolidation in the social media marketplace as new startups pop up and the better business models and company teams outreach the weaker companies. When we see layoffs are we seeing this cycle play out, or are we seeing a greater economic crisis leak into our area? I suspect probably the first, at Nattergalen our business is heating up right now, and we network with a lot of white label community software providers and most of them are currently very healthy.

The other point, I'm astonished by some of the comments I've seen here today. Some of the posters seem to lack a fundamental understanding of how this marketplace works. Facebook and Myspace are too unique to be viewed as relevant social media business models. Money is made in social media either by utilizing tools like Facebook and Myspace or by starting a microsite that focuses on your brand or market and reaches a targeted group of real customers. Myspace and Facebook may have difficulty monetizing the way their owners fantasize huge traffic aggregators should, but microsites are a profit point when managed properly. As an industry social media is not Myspace/Facebook-centric and using them as a Dow Jones-esque metric to value the industry's overall health is wholly and completely inaccurate.

Anyways, my take is that this is a strong and healthy business, we'll see layoffs and closures, but we've been expecting that for a while and unless they are industry wide we should look at them as part of an expected wave of consolidations within the social media marketplace, not the sky falling.. The stronger businesses are profitable and growing and should continue to grow and make more money. I know at Nattergalen we are pretty hot right now and looking at resumes, not pink slips.

We echo Scott's comments above. In the market now, there are still many organizations just getting their feet wet with social media, online communities, and social networks. We are seeing strong interest in the areas of consulting with an emphasis on our B2B best practices and on the outsourcing of moderation for large organizations under a headcount freeze.

We expect a fall out, that there will be a consolidation of players in the next 3 to 6 months. We are working at aligning ourselves with the top software companies in the space where our nine years social media experience can help make the sale. We've had success recently with several organizations in this way. Patnering and collaboration are very important right now.

Those with strong experience in our industry will do well by helping clients prove the value of their offerings. We survived the first dotcom bust by emphasizing our experience rather than sticking to what's cool in the marketplace, so we're actually quite bullish about this shakeout and our ability to grow.

Makes me feel better that we bootsrapped our business with revenue. Yes, that's right, I am describing 360 Digital Influence as a boostrap startup operation.
Those who have done that will fare better during what will be a significant reduction in marketing spend hasn't hit us yet, but will). What social media marketers (anyone whose business model intersects with marcom in some way) must do is sharpen their performance measurement. the efficient digital marcom choices will stand strong. If you can demonstrate the business impact of your services in a credible way that doesn't involve 25 slides and a loose interpretation of the word "engagement," you will do better in the weeks and months to come.

Thanks John, that's an interesting perspective that I didn't realize earlier.

I understand the angst and soul searching regarding business models, but my opinion is that employment in social media will continue to grow throughout the next few years. The underlying traffic and audience growth will drive increased employment.

Here is a great chart if you want to examine historical trends in employment statistics, both goods and service-oriented jobs:

http://www.adpemploymentreport.com/ner/charting...

Oh o. Sounds like the giant sucking sound is causing some havoc. I was actually saddened by the layoffs at Seesmic. You kind of go to know the people there via their tool.

It seems that Yahoo! is laying off 3,500 employees too http://valleywag.com/5064258/yahoo-to-cut-3500-...

If you are interested in helping the U.S. government to implement social media strategies, Booz Allen is hiring. See http://steveradick.com/2008/10/07/wanted-people...

Gah! I'd been following this post thinking I'd be fine given the industry I'm in... then I got laid off last Thursday, October 30th! >_Technicolor Electronic Distribution Services - Media & Entertainment industry

More layoffs announced: LinkedIn chops 10 percent. Mostly a preemptive move, according LI source, and likely a smart one. As a SaaS community vendor, we're growing and still feel the need (globally) for institutions/organizations to implement their social networking strategies - a large part of which involves establishing their own, private online communities.