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Is Popularity Valuable?

Recently, I attended a lunch where many of the attendees were commenting about how many people they had linked up with on LinkedIn and how many friends they had on Facebook or Twitter. You can fill in the blank on which ever social network you wish. I have always wondered if this was valuable.

I looked over the history of the most wealthy people in the world in recent times and surprisingly most were not popular and in fact, most were considered misfits, nerds, hermits and yes, even not cool. They were not “friends” of many people until after they became wealthy – interesting.

Many of the creators of the current social networks were not social at all; in fact some were considered outsiders by the social titans. On the other hand many people have made fortunes by being social and popular while developing products that enhance the social attractiveness of each individual.

From an investment viewpoint I am puzzled as to whether or not the social networks are sustainable. Revenues are slowing from traditional sources, plus new sources of revenue are more troublesome than predicted. In many cases, when I ask people if they would pay $5, $10, or $15 / month to continue with their subscription on these networks 95% say,” No”. You have to ask how loyal are these customers? And, how much value is there in the networks if 95% would drop the service at a minimal fee?

The verdict is still out but, this non-social participant wonders, will the trend last only as long as a prom queen’s reign?

By |2012-04-27T11:19:15+00:00April 27th, 2012|Categories: Money Basics|0 Comments

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Articles attributed to "Guest Contributor" are written by former employees or invited guests. Contents are for your consideration only The opinions expressed herein are those of the authors and do not necessarily represent the views of Charter Trust Company. Nothing contained in this communication should be construed as investment advice.

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