The Social Media Sector Continues To Expand:
Hootsuite, the widely used social media mobile software that allows users to manage several accounts in its platform, has just received a $165,000 investment after obtaining $20 million last year. The company is four-years-old and is a major player in the social media sector because of the ability to manage several accounts simultaneously with ease. If you want to send out a tweet on several different handles like @abmuku or @intersrchmedia, you can update Hootsuite instead of updating each of them individually. Hootsuite also allows users to send updates of that same message on LinkedIn, Facebook (which for very good reasons prefers manual updates that are less necessary for other sites) or sites that work with the Hootsuite API. The software boasts over 7 million users and it’s expanding overseas, the new investment will be used to continue growing the company internationally.
Facebook has shown that social media networks can be profitable via mobile devices and Yelp confirms network effects from early stage growth can be profitable. The move to social media mobile isn’t going unnoticed by investors who are gobbling up social media companies and making investments in the early stages. The resistance from the sector by investors and analysts is decreasing because social media is no longer a fad. Expanding a digital/mobile network can bring in significant gains for companies who invest early in building an organic presence.
Expect to see similar investments in social media companies in the near-term along with more IPOs for mature social sites like Twitter. Monetizing a large user base via advertising isn’t the only way to be profitable as Hootesuite has shown via a small subscription fee that many medium sized businesses can easily afford. The trend in social media growth will continue unabated for the next few years with consolidation among a few brand names in the short-run.