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Path Lays Off 20% of Workforce, Social Overload or Just Right Sizing?



Path LogoCould it be that we are already at the limits of the social space just a few short years into the experiment?

We have the stalwarts of Facebook, Twitter, to a different degree LinkedIn and even Google+ (which will hang around because there is just enough interest and it’s really more about productivity than social but that’s for another post). They are solid for now.

Then there is a second tier with the likes of Pinterest, Tumblr (is that really a social network tool?), Instagram, Vine and a few more.

Then there is Path. It’s the anti-Facebook where social restraint is encouraged as compared to Facebook’s social excess. It’s interesting and there are folks who swear by it but as evidenced by the latest news around the social network the question begs “Will it survive?”

Valleywag reports

Dave Morin’s social networking app Path laid off 13 employees today, which represents 20 percent of the company’s staff. A spokesperson for the company confirmed the layoffs, saying, “We’re working to realign the company to support continued innovation and Path 4.0.”

In response to questions about layoffs as a bad sign for a startup in growth mode, the Path spokesperson said, “It’s just a realignment of the company. I wouldn’t read anything into it. The business is strong we have 20 million users.”

If you are the Path spokesperson of course you wouldn’t read anything into it (other than “Phew! At least I can still act like everything is OK and get a paycheck!). But as regular old folk like we are on the outside, you have to look at this and wonder if there is room and is Path really struggling?

While 20 million users is impressive it is minuscule by today’s social network standards. Oh and there is the pesky thing about revenue. No ads means not much of a chance for monetization. Is the subscription option not getting traction at this point? That said, the valuation most would agree on for the service is $400 million, which is pretty stout for a company that is ‘realigning’.

So the question remains, “Is there room for more?” Will the social fabric of the future make way for smaller niche social players or will it prove to be too much to compete against the big boys of the social space? To end users have enough social bandwidth to play in multiple areas? From what I have seen thus far, those with a real life probably don’t.

How do you view Path and other smaller social players? What value is there (if any) to your marketing efforts both now and into the future?