2016 was a fascinating year for social media. It was one where a politician was able to use it to his advantage like never before and where one of the newer players came to finally dominate the older generation. It was a year where one of the biggest social media companies was acquired and another couldn't find anyone who wanted it.
There will some exciting things coming out social in the next couple of years, and the groundwork for that was layed out in 2016.
Here are the biggest events that happened in social media over the past year:
1. Donald Trump uses social media to change campaigning forever
If there's one thing you can certainly say about Donald Trump it's that he forever altered politics, and the way campaigns are run. A big part of that had to do with social media, which he used to bypass the gatekeepers in the media like nobody before him. He turned Twitter into the new press release, and began using Facebook Live to broadcast its own campaign coverage show. Social media became his way of broadcasting his message without any filter.
Trump is far from the first politician to use Twitter, but he made it a larger part of his campaign than anyone has previously (I have no recollection of Mitt Romney ever causing a stir on Twitter back in 2012), and he was very proud of that fact, saying, "Now, tweeting happens to be a modern day form of communication. I mean, you can like it or not like it. I have, between Facebook and Twitter, I have almost 25 million people. It’s a very effective way of communication. So you can put it down, but it is a very effective form of communication. I’m not un-proud of it, to be honest with you."
Even though people are far less enthusiastic about his use of Twitter now that he's actually going to be the President, Trump has not slowed down, and it's easy to see why not: he has a platform that offers him no restrictions. He doesn't have to ask anyone to let him broadcast his message, nor does he have to answer any questions or be challenged in any way. He can just say whatever he wants.
Many would say that probably not a good thing, but there's no denying the fact that social media has changed how politicians interact with their constituents. It's a new world.
2. Facebook gets caught in a fake news scandal
While Donald Trump may be best known for his Tweeting, it was actually Facebook where he seemed to cause the biggest stir.
In the days after the election, numerous articles began stating outright that Facebook was responsible for handing Trump the election thanks to what was deemed "fake news." While Mark Zuckerberg denied the notion, calling it "a crazy idea" and "pretty out there," just days later he wrote a Facebook post in which he said that, actually, the company would be cracking down on such stories after all (I guess that's what happens when even the President of the United States starts calling you out).
Part of the company's plan includes being able to classify news better so it can "detect what people will flag as false before they do it themselves," while also making it easier to report fake news, and giving users warnings about stories that have been marked a fake.
This scandal highlighted an inherent problem with Facebook, and other social media platforms: this is where many people now turn to to get their news, yet Facebook, in particular, does not want to be a media company. It wants to be a platform where users can share with each other, not where editorial decisions are made. Unfortunately, that isn't going to cut it with most people anymore, and, going forward, the company is going to have to figure out a way to distribute accurate content while not being accused of censorship. It's going to be a tough line to walk, but a fascinating one to watch.
3. Microsoft makes history with purchase of LinkedIn
In June, LinkedIn was acquired by Microsoft for $26.2 billion, or $196 per share, a 50 percent premium above LinkedIn's closing price before the deal was announced. The price for the deal was so high that it turned out to be the largest acquisition in social media history, over $4 billion more than Facebook paid for WhatsApp. This was a megadeal of pretty staggering proportions.
In December, the company finally outlined what it plans to do with LinkedIn, including having LinkedIn identity and network in Microsoft Outlook and the Office suite, LinkedIn notifications within the Windows action center, and enabling members drafting résumés in Word to update LinkedIn profiles. The truth is that this deal was all about data; LinkedIn boasts 400 million members and Microsoft now has access to them like never before.
Not everyone was happy with the deal, specifically Salesforce CEO Marc Benioff, who had made a bid to acquire the company, but lost out to Microsoft.
"The reason that I liked LinkedIn was, I liked the business architecture. You know, I am a student, and somebody who really appreciates different business models. Our business model, there is a shell of it inside LinkedIn that we would would have amplified around deferred revenue. That's what I was really excited about," he said at WSJDLive in October.
What Microsoft wants to do is commingle the data streams, and then "create a barrier to entry for other companies," something that Benioff said is illegal.
He isn't just talking about disliking what Microsoft is doing; Benioff is taking action. Salesforce, along with other companies like Oracle and Infor, filed a complaint in Europe over Microsoft using LinkedIn "as a competitive weapon against other software companies."
4. Snapchat turns to hardware
2016 turned out to be a big year for Snapchat in terms of its own growth and ambitions. The company had one really big surprise in store: it expanded its offerings and became a hardware company in the process.
In September, Snapchat announced that it was changing its name to Snap Inc, and that it was launching a new product called Spectacles, sunglasses with an integrated video camera that makes it easy to create Memories. They began showing up in pop-up shops around the country, and they gained the kind of traction and buzz that Google Glass had, without any of the blowback that the previous device had experienced. Not yet, anyway.
The Snapchat app still exists, of course, but the fact is that the company obviously has much larger ambitions than just being a messaging app. That will very likely serve it will as it plans for its future as a public company.
5. Facebook and Twitter go all in on live video
While the push for live video on social media began with Twitter's purchase of Periscope in early 2015, it was this year that both Twitter and Facebook really kicked it into high gear.
For Twitter that meant deals to broadcast content, include winning the right to stream NFL games online, as well as a partnership with CBS News to stream both the Republican and Democratic conventions over the summer. Twitter also live streamed all of the Presidential debates, which, surprisingly, brought in even larger numbers than football did.
Facebook, meanwhile, debuted Facebook Live in April, with focus on individual streaming, allowing anyone with a camera to broadcast right to the platform. Basically, the company turned itself into a television station, one where everyone can have a channel dedicated solely to themselves. In essence, now everyone can be a Kardashian.
The CEOs off both companies have touted live video as the future on their respective platforms.
"The reason why we give disproportionate attention to it is because we're trying to help push forward new formats that are not just about consuming content but are really about interacting, so Live, 360 video, and there will be others in the future," Mark Zuckerberg has said.
"I also think that there are going to be a lot more interactive forms of video than just Live and 360 like we're talking about now. And I think that this extends not just to video but for all the different types of media and audiences that we're serving. So we're very excited about continuing to do our work to help unlock all the expression and connection that people want to do,"
"We've been doing live for 10 years and we believe we have a leadership position in it," said Jack Dorsey. "It's about hosting a conversation around a live event. Twitter has always been the best place to see what's happening immediately, to see what's happening instantly, and to bring people together around a particular shared experience."
6. Snapchat grows bigger than Facebook and Twitter... at least in some ways
Remember how I said this was a big year for Snapchat? What I was referring to is the fact that this was the year that Snapchat finally surpassed some of its biggest rivals in some key metrics. Snapchat is now, officially, one of the big players in the social media space.
In April, Snapchat revealed that was seeing 10 billion video views a day, two billion more than Facebook. The company had been growing this metric extremely fast; the number of views a day on Snapchat was 8 million at the beginning of March, meaning it grew by 25 percent in less than two months. In May of last year it had only two billion views, and by November the number of views was six billion, so the number had quintupled in a year.
Then, in June, it was reported that Snapchat had reached 150 million DAUs, compared to less than 140 million for Twitter. In addition, Snapchat is also expected to surpass both Twitter and Pinterest in total users.
If there are any Snapchat doubters left, these figures should finally have put them to rest for good.
7. Twitter couldn't sell itself
While LinkedIn got bought for a staggering amount of money, nobody would give that kind of love to Twitter. Sad emoji face.
The idea of someone buying Twitter is an idea that has been out in one form or another for nearly the entire life of the company, but 2016 was the year the idea really ramped up, and the year that it absolutely fell apart.
In October, three main suitors emerged for Twitter: Google, Salesforce and Disney. The speculation drove the company's stock price up to its highest price since the beginning of the year.
It had seemed that Google was the most likely acquirer of Twitter, mostly because it has been the most frequently assumed target for such a purchase, given how badly that company wants to get social right after it failed with Google+.
Disney also made some sense, as it could benefit from Twitter becoming more of a media company. That would certainly have appealled to Disney, which owns both ABC and ESPN, and might have been looking for a social media platform to leverage all of that content, especially as people have started to cancel their cable subscriptions.
However, it only took a week for each of these companies to publically turn down the offer, and for Twitter's stock to once again sink.
Benioff later said Salesforce dropped out because its involvement had leaked, but that the company "had a very exciting vision of what we would do with Twitter." Disney, meanwhile, is said to have turned down the chance to buy Twitter due to its prevalent problems with abuse. Ultimately, the fact that one of the biggest social networks couldn't find a buyer only reinforced the notion that Twitter has some major problems that cannot be easily fixed.
8. Instagram copies Snapchat
For Snapchat, its amazing growth has proven to be a double-edged sword. Sure, it's got some serious cache now, and it can hangout with the big dogs, but those same company are coming for it even harder than they were before. Facebook already tried to take down Snapchat multiple times, and now another of it's properties is gunning for the company in a big way.
Instagram unveiled a pretty blatant rip-off of Snapchat's Stories feature in August. Instagram even went so far as to also called its new feature "Stories." That's how little the company was trying to hide what it was doing.
Like Snapchat's product, Instagram's Stories allows users to post moments from their day, creating a narrative based on their photos and videos. Then, again like Snapchat, they will disappear after 24 hours and won’t appear on the user's profile grid or in feed.
The poaching of the idea was so brazen that Instagram CEO Kevin Systrom even gave Snapchat credit for the idea!
That was followed by the introduction of Event Channels, which "collects the best videos from concerts, sporting events and more," taken by users. The company will then curate the best content to create the channel.
If that sounds familiar, that's because it's pretty much the exact same idea behind Snapchat's Live Stories feature, in which it collects photos and videos that are location based, as in all of the content will revolve around a singular event, like a concert. That content is then curated and turned into a channel.
Instagram not only took the idea, but actually improved upon it, making the channel personalized for each user, highlighting the events they might like. Instagram can do this because it allows its users to follow accounts. So, if someone follows Lady Gaga, for example, they would likely be interested in a channel based around one of her concerts. Snapchat isn't able to do something like that, and can't offer that same level of personalization.
This could be bad news for Snapchat. After all, Instagram does have the network effect on its side: the company reached half a billion total users in June, with 300 million daily active users. That's double what Snapchat is said to currently have. If Instagram can give them the best features, users might just start going where their friends already are.
9. RIP Vine
Twitter very obviously sees video as the key to its future and, in a way, its acquisition of Vine back in 2012 can be seen as its first major step into the world of video creation. In that sense, the purchase was a success, as it pushed the company toward an area that could prove to be its salvation. In any other sense, it was a failure, as Vine never caught on the way Twitter had hoped.
n October, Twitter announced that it would be shutting down Vine, though it since revised its plans to turn it into Vine Camera, in which users will still be able to make six-second looping videos, and either post them directly to Twitter or save them to their phone. Either way, Vine wasn't the video app that Twitter had expected it to be.
Vine was very likely killed by Instagram, but, more importantly, Snapchat. Instagram debuted its own video feature only six months after Vine became available. The general consensus at the time was that it would prove to be a Vine killer, but it was really Snapchat, that was the deathblow.
10. Snapchat gets ready to revive the IPO market
Snapchat used a provision in the Jumpstart Our Business Startup (JOBS) Act, which allows companies to file to go public without letting anyone know about it. Only companies with less than $1 billion in revenue can file this way. The JOBS Act loosened regulations for what it called "emerging growth companies," which only applies to companies that make that much in revenue. Twitter took advantage of it mere months before its IPO date, as did Trulia. Box did the same thing last year.
The company could be going public as soon as March of 2017, and the IPO would potentially value Snap at $25 billion. When Snapchat last raised funding, a $1.8 billion round in May of this year, had valued Snapchat at $20 billion; it had been valued at $16 billion last year.
Snap makes the majority of its money from ad revenue, and is growing by leaps and bounds year-over-year. Leaked financials from earlier this year showed Snapchat growing its revenue by more than 8x from the beginning of 2015 to the end, going from $4 million Q1 to $33 million in Q4, for $59 million total.
The company has told its investors that it expects revenue of between $250 million and $350 million in 2016, and a report from eMarketer last month predicted that the company will see $366.69 million in ad revenue this year, and then $935.46 million in 2017.
Going from what it made in 2015 to what it generated in 2017, that would be a 1,485 percent increase in revenue in just two years.
Of course, there's no guarantee that Snapchat will go through with its plans to go public, but if it does, it will be the largest tech IPO since Alibaba went public in 2014 for $168 billion. It would also be the largest U.S.-based tech IPO since Facebook went public in 2012 at a valuation of $81.2 billion
(Image source: socialcoopmedia.com)