The Real Value Of Social Media

I always tell my clients that social media is a valuable piece of their publicity and marketing portfolio. It certainly is not the only thing one should focus on, nor should it be ignored. But perhaps the most valuable thing about social media is that the companies involved in it see their stock price make a killing on Wall Street.

As Twitter’s IPO launched yesterday for $26 a share, turning it instantly into one of the most valued companies in the world, let’s not lose site of the fact that Twitter lost money this past year. But this doesn’t deter people from gambling on the huge tech bubble.

If you invested $1000 in Facebook on day 1, it would have returned $1300 just a little over a year later. That’s a nice 30% profit. But a grand put into LinkedIn just a year earlier would be worth $5000 today- a 400% increase. $1000 in Google on its opening trading day nine years ago goes for $12000 now. Yahoo! has gone from $1,000 to $61,000 since its April 2004 debut. EBay is worth $69,000 since 1,000 was invested in Sept ’98. But the biggest one of all is Amazon. In May 1997, if you put in $1000 to buy its stock you’d have a $239,000 windfall today. Amazon loses tens of billions of dollars every quarter.

Of course, you can kick yourself for not buying in these companies, but if you look at all of the IPO’s that later tanked, you’d not be so hard on yourself. Who can guess what will rise or fall, and who can guess when to sell? Guess is the speculation word on tech stocks. They are bid up on wild speculation and a casino-driven mentality. It’s not fair from being a Ponzi scam, where shares trade hands until eventually someone is left holding worthless stock.

How is Amazon  worth so much when it loses more money than most companies can make? How does a company that produces nothing, like eBay, have such a high value? How does a company like Yahoo!, with a revolving CEO door, get such a high stock evaluation?

Wall Street has no relationship with reality. You invest at your own risk, for just as it seems to take little to move a stock sky high, it takes even less to drive it into the ground. 

So, don't bother to send a tweet. Just buy up twitter/ If you really want to capitalize on social media, forget tweeting about your book. Just buy Twitter, do nothing, and watch it soar.

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Brian Feinblum’s views, opinions, and ideas expressed in this blog are his alone and not that of his employer, Media Connect, the nation’s largest book promoter. You can follow him on Twitter @theprexpert and email him at brianfeinblum@gmail.com. He feels more important when discussed in the third-person. This is copyrighted by BookMarketingBuzzBlog © 2013