This morning I made my last post on Facebook telling my friends I was withdrawing from the FB community. I decided that my privacy outweighs the benefits of keeping in touch with old friends/acquaintances (more of the latter than the former).
I have never invested directly in Facebook or any other social media company due to my concerns about data security, privacy and fickleness of fashion. Until now this has looked naive and mistaken as share prices have soared. However, I have never wavered in my conviction that these companies were too risky for my funds, which target absolute real returns rather than relative returns versus an index benchmark.
Data security concerns are probably obvious for such conspicuous data goldmines, and, of course, this is a risk for all companies these days. However, I believe at some stage even Generation Z will realise the drawbacks of living such public, daily-documented lives. In 20 years’ time when they are applying to be head of MI5, a tweet saying all UK politicians should be whipped at dawn posted in the throes of emotion at a Little Mix concert may come back to haunt them.
As YouTube celebrities continue to fall foul of media scrutiny and everybody’s historic social media posts get combed for inappropriate utterings, ending in jobs being lost or legal proceedings, I believe people’s love of such sites may just wane. With so much freely available information, these days it’s feasible to vet applicants for even the most mundane jobs. Burger flippers are under the same microscope as candidates for the HM Foreign & Commonwealth Office.
One of the biggest problems is how quickly attitudes change. As a baby boomer, I’m so glad I couldn’t tweet my views on Abba’s Agnetha Fältskog when I was a teenager in the 70s. Would the uncontroversial language (at the time!) we used in innocence then be considered acceptable today?
Another issue is the one I have mentioned in previous blogs: the empowered consumer. Thanks to social media and independent online customer reviews, consumers are much more enlightened about quality and prices in traditional retail arenas. In the next few years, consumers within the digital economy will start to find out just how their data is being used. This could erode the competitive advantage of Silicon Valley. There may even be some backlash if consumers feel exploited...
Even now, many people have leaked away from Facebook toward more focused rivals: LinkedIn for the entrepreneurial types and Instagram for those that are down with the kids (Facebook owns this one). Facebook itself grew by wooing the users of older social media sites to take up its platform. The competitive advantage of these social media brands always seems invulnerable right up to the point where its users bleed away.
Are these just the concerns of a totally out-of-touch 53-year-old baby boomer? I will get Will (my assistant fund manager) to blog his views so we get a balance.
Don’t get me wrong, I am not predicting Armageddon for social media. I do believe, however, that as governments catch up, finally, with policing the internet and social media, we may see the days of unchallenged exponential growth come to end.
In the meantime, I’m going to have to ring or meet up with my friends. My sans-Facebook contacts will be much less than before so I may suddenly feel less popular. On the plus side, I won’t get any more friend requests from random mysterious women wanting to meet up with me.
