Barry Collins is staggered by the money being wasted on social networks
So farewell then, Friends Reunited. Sixteen years after it launched and roughly 15 years since anyone last bothered to visit it, they’ve finally decided to switch off the site that arguably set the entire social-networking bandwagon rolling.
That Friends Reunited even managed to keep going for as long as it did is nothing short of miraculous. It was the ultimate one-hit wonder: head online to discover all the school chums you’d lost touch with over the years, pay your fiver to get their contact details, then swiftly realise that the reason you lost touch with Gary from 5G is that you didn’t actually like him in the first place. Once you’d chuckled at the fact that the school bully was now a Trainee Trolley Retention Operative at Tesco, and that Steve from 4C had married and divorced Suzie from 3F, Friends Reunited retained as much long-term appeal as a second-hand Murray Mint.
Unbelievably, the idiots in pin-stripes continued to fall over themselves to throw money at the site. Friends Reunited had well and truly peaked before 2005, but that didn’t stop ITV spending a ridiculous £175m to buy it. Even four years later, with Facebook well established as the go-to site for voyeuristically monitoring the hair loss and expanding waistlines of your classmates, ITV still managed to tempt DC Thomson to pay £25m to take the wreckage off its hands, before it was finally offered back to the original founders.
Still, nobody’s spending silly money on social networks anymore, are they? No, they’ve upgraded to spending obscenely stupid amounts of money on them, instead. In 2013, Facebook paid $1bn to acquire the photo-ruining, selfie-addict’s social network of choice, Instagram. Still, that’s just loose change at the bottom of Mark Zuckerberg’s drawer. A year later, Facebook slapped a cheque for just shy of $20bn on the table for teenage text-messaging service, WhatsApp, even though its only sources of revenue were a smattering of ads and a $1 annual user fee – both of which Facebook have just abandoned, meaning the $20bn app makes no money whatsoever.
That said, both of these hugely expensive, lossmaking apps were strategic purchases for Facebook. When your company is worth in excess of $250bn, it’s arguably worth spending a $1bn here or $20bn there to ensure that potential competitors can’t steal your lunch. But when you consider the actual sums of money that are being wasted on these networks – which are every bit as fragile as Friends Reunited – it’s enough to make you weep.
WhatsApp’s $20bn price tag is more than the net value of Centrica, the company that owns British Gas. It would be just enough to buy Hewlett-Packard or Tesco – huge multinational companies with thousands of staff that have been going for decades.
Zuckerberg recently announced plans to give away 99% of his Facebook shares – about $45bn worth – to good causes. Perhaps the next time he’s signing an 11-digit cheque for a rising competitor that nobody will remember in a decade’s time, he’ll decide that the money would be better spent on eliminating poverty, basic healthcare or any of the other admirable causes he plans to give his money to, rather than just buying more ‘friends’.