As those in the Forex world know, use of various types of social media is certainly on the rise around the world. For everything from looking for a job, to keeping up with friends and family, and getting hold of the latest news and celebrity gossip, we are relying on social media more and more every day.
But making money from social media – well that is something different altogether.
Two of the world’s leading business-focused social media platforms reported Q1 results this week, and both took big hits after disappointing investors. Twitter Inc (NYSE:TWTR) saw its shares drop more than 25% in the two days following its Q1 report – which was leaked out early, embarrassing the company in the process.
And late Thursday LinkedIn Corp (NYSE:LNKD) had its turn, seeing its shares hit more than 20% in aftermarket trading after providing weak forward guidance.
The Forex trading world as well has had its share of social media train wrecks, with a number of pan-broker platforms launch only to eventually evaporate (does anyone remember Currensee?).
However as social media continues to see growth in use in the ‘real world’, we believe that investors will continue to bet on the technology. In just the past two weeks we’ve reported on several tens of millions of investment dollars being poured into Forex-related social and copy-trading platforms.
Retail forex broker eToro upped its latest financing round by $12 million, bringing a very impressive investor in Commerzbank into the fold. eToro bills itself as the world’s largest social investment network, with 4 million registered users in more than 140 countries. It is clearly also the most effective retail forex broker in use of platforms such as Facebook and Twitter.
And social trading platform provider Ayondo raised CHF 6 million from its shareholders, to fund growth in approaching new markets.
Can these platforms succeed where others have failed – not just in attracting people and steady traffic, but also in turning those results into success on the bottom line?
Time will tell.