Wednesday, November 28, 2012

Social Media Mergers: #Like?


 According to a Bloomberg Businessweek article, the 2009 failed merger between Facebook and Twitter qualifies as one of the twenty worst in recent history[1]. The clip suggests that the deal fell through when the valuation of Facebook was called into question. Granted, the potential deal was in talks before Twitter and Facebook had reached their current respective popularity and value, but there are many factors that could have doomed or promoted the success of the merger had it been completed. Various factors including the “synergy mirage”, as explained by Carroll and Mui[2], respective target audiences, and each company’s corporate culture could have greatly affected the outcome of the possible partnership.

The corporate structure and culture of the social media sites are both described as innovative, fun, and open, however there are some distinct differences between the two companies in the way that they approach their users. While Facebook prioritizes connecting users while allowing them to secondarily produce posts, Twitter tends to focus on an individual’s ability to create content. This suggests that the companies are targeting different audiences who have different goals for their social media usage.

Despite the differences between sites, a recent study suggests that the most common users of Facebook and Twitter fall into generally the same demographic category, based on age and gender[3]. While this is not entirely surprising, as those who use one kind of social media tend to use others, it is surprising that the differently perceived functions of both social media sites attract almost identical user profiles. This is a good indicator that the merger could have been effective, as both companies already cater to the same demographic pool while working to attract those demographic categories that are still only potential consumers.

Another potential pitfall of the merger that has been overcome is the profound gap between Twitter and Facebook as lucrative companies. What would have once been a potential free-riding opportunity for Twitter is far less apparent, given the recent and consistent growth of the social media site. The individual success of each company puts them both in complimentary positions. Fusing creative resources and capabilities might in fact allow both companies to expand further than possible individually.  

As merger talks between the two companies are speculated to resurface, there is also talk that Google may try and step into the absorb Twitter instead. Based on the similarities and advantages brought to the table between Facebook and Twitter, I believe that partnership could prove quite successful. With other companies beginning to factor themselves into the equation of merging social media, it is only a matter of time before we can see the real effects of such partnerships.  

Which social media sites do you think would best compliment each other?



[2] Paul B. Carroll and Chunka Mui, “Seven Ways to Fail Big”, Harvard Business Review, September 2008 edition, (Accessed 28 November 2012) http://hbr.org/2008/09/seven-ways-to-fail-big/ar/1
[3] “Social Network Demographics”, Royal Pingdom, 21 August 2012, (Accessed 28 November 2012) http://royal.pingdom.com/2012/08/21/report-social-network-demographics-in-2012/

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