Social media- worth an investor's look?

By Tim Suffish CFA, CPA Vice President, St. Germain Investments Social networks have been growing and evolving at breakneck pace in recent years. First there was MySpace, which was founded in 2003 and quickly became a "new media" behemoth, quickly gaining acceptance by users as the place to easily establish your online identity. By August, 2006, MySpace had over 100 million users worldwide. Although it wasn't until September, 2006 that it officially became available to the general public, Facebook had been in use by the college crowd for over two years. Founded by Harvard sophomore Mark Zuckerberg, Facebook got its start in his dorm room. really. It quickly grew beyond the walls of Harvard; first to the Ivy League, and then to all college and highschool students. Today, Facebook has over 200 million users. This type of growth is VERY attractive to investors and businesses hoping to tag along for the ride. A quick look at the statistics page for Facebook shows that each month more than 850 million photos and 10 million videos are uploaded to the site. As Facebook has gotten more mainstream acceptance in 2009, growth has gotten more impressive. More than 600,000 users are now joining Facebook daily. This "killer app" potential naturally caught the eye of Microsoft (and many others), and in October, 2007 Microsoft paid $240 million for a 1.6% position in Facebook. Quick math shows that this put a valuation of $15 billion on the whole company. Not too bad for a business started in a college dorm room just 3 years earlier, and it got there far quicker than Microsoft did. This brings us to Twitter, which, as a "micro-blogging" site enables users to share their thoughts (information) on a near instantaneous basis with anyone who wants to listen. The power of Twitter is front and center in the news of the day, as the contested Iranian election has lead to protests in Tehran and a hunger from outside the country for reliable, uncensored information. The widespread adoption of Twitter and Facebook and the distribution of information through both platforms has inspired articles in the mainstream press; from CNNPolitics.com we have "Will Facebook and Twitter help bring down Iran's government?" The democratization of the internet is here ! All of these platforms are bringing us closer together and keeping us more informed than ever. Take advantage of what these services have to offer. for free, as they really are changing the way we interact. Column provided to PRIME by: St. Germain Investment Management; 1500 Main Street, Springfield, MA; Phone is 413-733-5111 or 1-800443-7624; web site:www.stgermaininvestments.com