Social Media
I predict that Twitter will ultimately cease to exist by the end of 2023. The social media platform was purchased by a megalomaniac without a filter who cut staff by 50% and scared off 500 of the top advertisers on the platform, reducing advertising revenue by 40% within a matter of 3 months. What already non-profitable business do you think would survive that?
I also predict, unfortunately, that Meta will be one of the most successful social media stocks this year. Meta is still an advertising giant, and while it has focused and invested heavily on the metaverse in the last year, when that delusion dissipates, its financial model will be as healthy as ever, since it uses a very conservative accounting model and recognized all of that investment immediately, ensuring the metaverse investment won’t drag down the future P&L.
Organic Search
Much has been made about ChatGPT and its supposed threat to, well, lots of things, including Google. However, I predict that ChatGPT will not kill Google. Why? ChatGPT and other LLMs (large language models) rely on the datasets supplied to them to build their knowledge base. For every LLM, a new set of data needs to retrain the model before it can deliver new information. But Google (and other search engines) already have technology that refreshes their model hundreds of thousands of times a day, making the data that Google delivers the freshest representation of relevant information on the web. ChatGPT is a long way from being able to respond to new data and information, and without that, it will not be a Google-killer.
Media
I think media companies will, in preparation for a slower (but not recessive) economy in 2023, will focus on building stronger sales processes and infrastructure to prepare for the inevitable upturn. Media companies with a focus beyond 2023 will leverage lower costs of advertising to build audiences efficiency and cost-effectively. The reader will continue to be king even as reader revenue projections dip because, like reader revenue models, advertising models rely on an active and engaged audience to thrive, so building, attracting, and retaining an audience will be as important as ever.