Stocks in the Social Media Era: Finding the Sweet Spot Between Innovation and Experience

Submitted by J. Frank Sigerson as part of our contributors program.

Stocks in the Social Media Era: Finding the Sweet Spot Between Innovation and Experience

The World Wide Web just turned 25 this year. We’ve come a long way since, and we all have Tim Berners-Lee, a British scientist at CERN, to thank after he invented this space we’ve all come to know and love.

But who mentions the big ol’ WWW anymore? Already the term is Web 2.0, and already we have moved beyond that and are now currently in the era of social media — a term no doubt you will hear again (and again, and again) in the years to come.

Social media usually refers to a website that interacts with the user while providing information. Participation can take on many forms — allowing readers to leave comments on a post; a poll that shows results in real-time as users vote; or recording, calculating, and analyzing activities based on what the user clicks. Daniel Nations of About Technology writes: “Think of regular media as a one-way street where you can read a newspaper or listen to a report on television, but you have very limited ability to give your thoughts on the matter. Social media, on the other hand, is a two-way street that gives you the ability to communicate too.”

These days, most businesses are very well integrated with social media, primarily because the consumers are there. We have made social media so much a part of our lives that the majority of our daily activities are recorded and shared through various social media sites.

But what about social media behemoths themselves, like Twitter or Facebook? How viable is their business model? Should you invest in them?

Here are some social media stock picks:

Twitter (NYSE:TWTR)

Up by 0.14 points (0.35%) this week, closing price is at 40.61 as of 18 November. Forbes reported that the company had strong earnings for the second quarter, and user rate is still growing. Over the past few years Twitter has played a big role beyond merely posting thoughts with a limit of 140 characters. The platform has been a significant tool in keeping up-to-date with the latest news, from regime overthrows to the latest episode of Game of Thrones. It is a useful medium for news reporters, government officials, industries, and a lot of businesses to disseminate information in real-time.

Facebook (NASDAQ:FB)

Up by 0.10 points (0.13%) this week, closing price is at 74.34 as of 18 November. Boasting of a user base of more than 1 billion people, this definitive social networking site has its stock trading expensively. Per InvestorPlace, it is currently developing a new function that caters to the business sector called “Facebook at Work.” It is said to be Facebook’s answer to competitor, LinkedIn, and might be a game-changer.

AudioBoom Group PLC (AIM: BOOM)

Up by 37.16 points (0.56%) this week as indexed in the FTSE 100, closing price is at 6,709.13 as of 18 November. The only social media stock listed in the London Stock Exchange, AudioBoom is currently making waves as the only digital audio and social media platform dedicated to the spoken word. It offers a variety of content: syndicated radio shows (spanning news, sports, culture, etc.), podcasts, audio lectures and recordings, and more. Users can also record, edit and upload their own audio.

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Sources:

http://webtrends.about.com/od/web20/a/social-media.htm

http://www.forbes.com/sites/greatspeculations/2014/09/26/revisiting-the-big-four-social-media-stocks/

http://investorplace.com/2014/11/facebook-inc-fb-stock-screaming-buy/