From my Forbes.com blog The New Persuaders:
For much of this year, hundreds of little and not-so-little startups that help businesses run advertisements on Facebook have been playing the M&A game, buying rivals or related companies, getting acquired by bigger firms, or both. But the acquisitions were sometimes for big bucks, fueling a sense that the opportunities were huge for social marketing startups.
It’s not hard to find social marketing firms still thriving, but suddenly it’s looking a little more like a game of musical chairs. And while it would be easy (and wrong) to say the music has stopped, it’s becoming clear that a chunk of those firms will find themselves without a seat as the social media biz starts to mature and its growth chart no longer looks like a straight line up and to the right.
The recent struggles of Facebook and other social media firms such as Zynga aren’t new, of course. They prompted some folks to wonder if the social media bubble had popped a couple of months ago. But it appears now that advertiser uncertainty about social media is starting to hit the still-crowded ecosystem of social media marketing and ad firms.
Today, Salesforce.com laid off about 100 people from two social-media acquisitions, Radian6 and Buddy Media. Although it may not be surprising given likely job overlaps–and the fact that Buddy was losing big bucks before the sale–the layoff suggests that the market for social ads isn’t big enough to accommodate all the players that have sprung up in recent years, or at least all the employees working for them.