Like many people I’m here because of reddit going to shit. Twitter has increasingly been shit. gycat is shutting down in September. To me it seems like lots of bastions of social media are crumpling, but as a previous active reddit user, I’ve been personally effected. Is this just a frequency illusion or has something changed in the world that has changed the business case of these sites?
The tech bubble is starting to show signs of bursting. SVB alongside other large investent firms going down has shown companies that just being on the internet is not a sign of making money. Essentially the internet bubble is popping…again, as interest rates skyrocket and realized gains become smaller, internet-based companies seem to be scrambling to outpace the likes of Machine Learning and the new technological curve coming. Reddit going IPO, the Twitter shenanigans, etc… Essentially they’ve all realized that their sites and business models are being made obsolete by the “new wave” of businesses/startups relying on newer technologies and novel revenue models.
Tldr; this is the cycle, new tech comes out, old tech dies. It happens all the time, just that this time it’s not happening in our physical world but rather the virtual.
I think another major factor is that this is really the first time since 2008 that companies have had to deal with interest rates on their loans.
For 15 years, corporate money was functionally free from the government banks. It allowed a lot of things to happen that could not have otherwise happened.
Now that its not free anymore, the bar of profitability is suddenly a lot higher than it was last fall.
With interest rates going up it’s costing more and more to have borrowed money sitting in the likes of Reddit hoping for a nice payday one day.
This is really the biggest part. There isn’t room for the future right now, gains need to be realized to pay other investments and if not portfolios leaned out.
Yeah, except machine learning is also another bubble which I expect is going to burst pretty soon, so who knows where things will end up after that.