Social fourth-quarter 2012 analysis

1. Summary

As we wrote last quarter, there may be a weakening of interest in consumer social media businesses. But social technologies are working their way deeper and deeper into enterprise computing, and social media is playing a bigger role across advertising and marketing sectors. You’ll continue to hear more from social technologies in the enterprise-collaboration space, in traditional ERP systems and applications, and in marketing technologies.

Key highlights during the fourth quarter in the social-technologies space include:

• Social business software goes both vertical and horizontal. Driven by work media standardizationand the need to integrate older nonsocial tools, large enterprises are starting to adopt a“horizontical” architecture for social business software.
• Small and simple. At the same time, small businesses, freelancers, and creative professionals aredriving a countervailing trend toward a core sharing and sync architecture. These two forces willbump into each other in social business, sometimes resulting in bruises and sometimes insynthesis.
• Adobe and Behance build in community. This year Adobe acquired Behance, an online socialcommunity for creative that epitomizes the vertically focused integration approach.
• Can social media solve the online ad crisis? Ad networks and cheap social media inventory areexacerbating the existing polarization of premium versus remnant ad inventory. Analytics andsocial media could help stave off low CPMs, but much of the profit may go to sellers of marketingtechnologies.
• Facebook tests new revenue streams. Facebook hit 1 billion users, but it’s still dependent on cheapads. It showed some progress in mobile, and it started to test additional businesses. But brandadvertisers remain its biggest payoff opportunity, not ecommerce.

This quarterly wrap-up analyzes these events and trends as well as trends to watch in 2013.