AH! It’s the giant elephant in the room! Actually, I must admit it was the giant elephant in the room yesterday. Today it was in a huge front-page article in the New York Times’ Business Day section. Catherine Rampell wrote about bubbles. Which got me to thinking…

Rampell brings up an extremely valid point (illustrated finely by bubbles all around the main article.) There have always been bubbles. She cites the 20’s stock market & Florida Real Estate boom, the Gold Rush (of course,) the Railroads, and (humorously?) the Beanie Babies bubble of recent times.

But why is speculation about “this bubble being different” being written about during one of the worst recessions of our times? Is there even a bubble? My answer: I think so.

Now, I’m biased because I’m a dorkus malorkus on wheels, and I wear a pocket protector – but I think that Social Media is definitely on the rise, and is definitely raking it in. Twitter just got a round of financing totaling in $100 million that values the company at $1 billion. I suck at math, but I know those are high numbers, and that means a lot of money. Facebook just brought in its 300 millionth user last month, and has been cashing in big time for a while now.

So is Social Media a Bubble? Or is it the opposite – an Industry?

Here’s the case for both sides:

Bubble:

• Social Media is so new, you can’t possibly call it an industry. It’s barely starting to turn a profit in most cases, and no – you can’t take one (Facebook) or two profitable examples (Twitter) and call them an industry.
• There is so much free in this “industry” that advertising alone couldn’t possibly sustain it.
• Most of the people you are targeting have little buying power. Myspace, and now Facebook, are littered with 13 year olds making emo faces. They would have to save up their allowance to buy something.
• It’s just a passing phase. get over it!

Industry:

• Ahem. $1 billion for Twitter, 300 million users on Facebook. Facebook is almost the size of the United States.
• Advertising can sustain the industry. Freedom of information is the way the world is heading, and you can’t charge ‘membership fees’ anymore. Get over it.
• Plus, in some cases, things are just worth paying for – like completely online streaming TV stations. Where would these things be without Social Media? Oh, and the tiny ads before shows – cost lots of $.
• When Facebook goes public, will you accept Social Media as an industry? What about when Google Wave replaces email?

Anyway, I am way done arguing with myself. But I would love to hear what you guys think!

[polldaddy poll=2035119]