Technology Review: Are Social Networks Sinking? - 1 views
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However, the overall value of these companies is still largely based on growth potential, which now seems shaky. Microsoft's investment in Facebook valued the company at a massive $15 billion. But in November, Twitter refused to be bought by Facebook for a reported $500 million of its stocks plus some cash.
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Chris Alden, chairman and CEO of Six Apart, says that there simply isn't enough capital in the current market to sustain so many social-networking companies. "You'll see more consolidation in the next year or two," he predicts.
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In October, the third most popular social-networking site, Hi5, announced that it would cut between 10 and 15 percent of its staff. And in November, the business-focused networking sites LinkedIn and Jive said that they would slash their workforces by 10 and 40 percent, respectively.
