5 ms·

The "economy" is much, much larger than a few social networking apps.

by Erik816 10y ago

MegaButts 10y ago
I think the truth is somewhere in the middle. Don't forget Google makes its money from advertising. And as more people grow up expecting to have everything for free, more people will bawk at paying for ownership of anything. It's why so many people will sustain countless invasive advertisements to play a mobile game over weeks/months/years instead of just paying a 1 time fee of a few dollars. Advertising has transformed our economy over the past century, and especially this past decade.
- naravara 10y ago
  > And as more people grow up expecting to have everything for free I’m convinced this is more of a service problem than an inherent generational problem. At the moment many of the best-in-breed applications are ad supported because their whole raison d’être revolves around network effects and making people pay in or subscribe cuts against that. As time goes on, though, places where a subscription based business model can fit will start to catch on as the underlying technologies mature to the point where you can get any old dude out of college to run them rather than needing top-quartile development talent. This is especially true as you become able to position applications or services as ‘premium’ products. It’s easy to make people uptake new things with freeware business models. But as the products and services get more buy-in you’ll find more scope for other business models to thrive. For example, there is a cottage industry of subscription based matchmaking services that offer a more personal touch than typical online dating.
eldavido 10y ago
Social networking is becoming the dominant form of media. Media controls what people think, including their politics, and what products they buy. You need to stop and see the big picture here. facebook is basically as powerful as the entire TV industry combined, with all the power concentrated in a single company. The NYT recently reported that the average US facebook user spends 50 minutes/day on facebook. And people are watching less and less TV all the time. I'm not saying this is a good thing, quite the opposite, but I think it seems dishonest not to acknowledge what a huge effect these companies have had on every level of our society, from how people talk to friends, how politicians communicate with the electorate, how people decide what to buy, etc.
- Erik816 10y ago
  I never said social media was not powerful. The question is what percentage of the "economy" it makes up. This source[1] puts the share of the "internet economy" at 5.6% of US GDP. I'm not sure how those terms are defined in this study. But the point remains that no matter how powerful you think the internet and social media have become, the economy is large and diverse. Here is one breakdown of GDP by category[2]. Even if you are generous and include all retail (6%), information (4%), and entertainment (4%), that is still only 14% of the economy. I think people forget just how much economic activity is tied to things like government, real estate, healthcare, manufacturing, etc. The poster I replied to seem to imply that social media was making up most of the economy, and I think that's demonstrably false. [1] https://www.statista.com/statistics/250703/forecast-of-internet-economy-as-percentage-of-gdp-in-g-20-countries/ https://www.statista.com/statistics/250703/forecast-of-inter... [2] https://en.wikipedia.org/wiki/Economy_of_the_United_States#GDP_by_industry https://en.wikipedia.org/wiki/Economy_of_the_United_States#G...
  - eldavido 10y ago
    You're probably right. My fiancee is an architect and I invest in real estate so I probably have a broader view of this than most (if only due to the luck of my draw/circumstances). Plus my father worked his entire career in factory operations. Part of the problem is that HN is so software/Bay Area-centric, it's an industry cluster that pushes out a lot of traditional S&P 500 companies. To be honest, I have mixed feelings about this. On one hand, living here, you are definitely "in a bubble" thought and perspective-wise. On the other hand, living in the bubble means you get to see what's coming next, and let's face it, the S&P 500 is backward. It's hard to appreciate how backward so much of it is, it's practically incomprehensible to the average Bay Area tech person. People overall are paid just way less, 40-hour weeks are the norm, people don't read books or retrain much, everything is done via emailed word documents and playing "did you get the latest changes" vs. VCS), etc. Arrogant? Maybe, but you tell me how companies here can post such exceptional operational performance relative to their more "average" peers. Healthcare is enormous. Holy crap, what, 24% of GDP?

The "economy" is much, much larger than a few social networking apps.

by Erik816 10y ago

The "economy" is much, much larger than a few social networking apps.

I think the truth is somewhere in the middle. Don't forget Google makes its money from advertising. And as more people grow up expecting to have everything for free, more people will bawk at paying for ownership of anything. It's why so many people will sustain countless invasive advertisements to play a mobile game over weeks/months/years instead of just paying a 1 time fee of a few dollars. Advertising has transformed our economy over the past century, and especially this past decade.

naravara 10y ago
> And as more people grow up expecting to have everything for free I’m convinced this is more of a service problem than an inherent generational problem. At the moment many of the best-in-breed applications are ad supported because their whole raison d’être revolves around network effects and making people pay in or subscribe cuts against that. As time goes on, though, places where a subscription based business model can fit will start to catch on as the underlying technologies mature to the point where you can get any old dude out of college to run them rather than needing top-quartile development talent. This is especially true as you become able to position applications or services as ‘premium’ products. It’s easy to make people uptake new things with freeware business models. But as the products and services get more buy-in you’ll find more scope for other business models to thrive. For example, there is a cottage industry of subscription based matchmaking services that offer a more personal touch than typical online dating.

eldavido 10y ago

Social networking is becoming the dominant form of media. Media controls what people think, including their politics, and what products they buy. You need to stop and see the big picture here. facebook is basically as powerful as the entire TV industry combined, with all the power concentrated in a single company. The NYT recently reported that the average US facebook user spends 50 minutes/day on facebook. And people are watching less and less TV all the time. I'm not saying this is a good thing, quite the opposite, but I think it seems dishonest not to acknowledge what a huge effect these companies have had on every level of our society, from how people talk to friends, how politicians communicate with the electorate, how people decide what to buy, etc.

Erik816 10y ago
I never said social media was not powerful. The question is what percentage of the "economy" it makes up. This source[1] puts the share of the "internet economy" at 5.6% of US GDP. I'm not sure how those terms are defined in this study. But the point remains that no matter how powerful you think the internet and social media have become, the economy is large and diverse. Here is one breakdown of GDP by category[2]. Even if you are generous and include all retail (6%), information (4%), and entertainment (4%), that is still only 14% of the economy. I think people forget just how much economic activity is tied to things like government, real estate, healthcare, manufacturing, etc. The poster I replied to seem to imply that social media was making up most of the economy, and I think that's demonstrably false. [1] https://www.statista.com/statistics/250703/forecast-of-internet-economy-as-percentage-of-gdp-in-g-20-countries/ https://www.statista.com/statistics/250703/forecast-of-inter... [2] https://en.wikipedia.org/wiki/Economy_of_the_United_States#GDP_by_industry https://en.wikipedia.org/wiki/Economy_of_the_United_States#G...
- eldavido 10y ago
  You're probably right. My fiancee is an architect and I invest in real estate so I probably have a broader view of this than most (if only due to the luck of my draw/circumstances). Plus my father worked his entire career in factory operations. Part of the problem is that HN is so software/Bay Area-centric, it's an industry cluster that pushes out a lot of traditional S&P 500 companies. To be honest, I have mixed feelings about this. On one hand, living here, you are definitely "in a bubble" thought and perspective-wise. On the other hand, living in the bubble means you get to see what's coming next, and let's face it, the S&P 500 is backward. It's hard to appreciate how backward so much of it is, it's practically incomprehensible to the average Bay Area tech person. People overall are paid just way less, 40-hour weeks are the norm, people don't read books or retrain much, everything is done via emailed word documents and playing "did you get the latest changes" vs. VCS), etc. Arrogant? Maybe, but you tell me how companies here can post such exceptional operational performance relative to their more "average" peers. Healthcare is enormous. Holy crap, what, 24% of GDP?