Sociobiology And Social Media

Sociobiology And Social Media
Photo by geralt (Pixabay)

Evolutionary biology suggests that between the ages of 12 and 25 people tend to be intensely interested in two things: social status and sexual selection.

 

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This makes perfect sense.  As people enter prime reproductive age, status and sexual standing are the two things that have the greatest impact on successfully passing their genes to future generations.  It is no surprise then that people of that age are intensely social and make massive use of social media.  The hard question is what does it mean for investing in social media?  Despite their intense focus on social sorting, young people do not control most of society's resources and constitute only a sliver of total consumption.  Nonetheless, the idea is that if a company like Snap can attract a huge following among the young, those customers will stay with the company throughout life.  But there is a problem.  As you age matters of social and sexual status become settled.  People begin to realize that others are not that interested in them and they are not that interested in most others.  As a result, their interests in social media change.  The voracious appetite for right now interaction that disappears is replaced by the desire to keep in touch with family and close friends.  The very features that made a social site cool when you were young, becomes an irratating pain in the neck as you age (and as your consummable income increases).

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I am not sure what all of this means for investing in social media companies like Snap but I think it is something that cannot be overlooked.

Article by Brad Cornell

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Bradford Cornell is an emeritus Professor of Financial Economics at the Anderson School of Management at UCLA. Prof. Cornell has taught courses on Applied Corporate Finance, Investment Banking, and Corporate Valuation. He is currently developing a new course on Climate Change, Energy and Finance. Professor Cornell has published more than 125 articles and four books on a wide variety of topics in applied finance. Professor Cornell is also a managing director at BRG where he heads the practice on Climate Change, Energy and Finance. In addition, he is a senior advisor to the Cornell Capital Group and to Rayliant Global Advisors. In both capacities, he provides advice on fundamental investment valuation.

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