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“Social media” is a term that gets thrown about with increasing abandon these days. It is used to refer to sites from Twitter to Facebook to Google Plus and to everything in between. If anybody still went to MySpace anymore, it would apply to Myspace. It definitely applies to Reddit, which has more influence on the Internet and across social media spaces than most people realize. It applies to photo and video sharing sites like Instragram and Vine. Then there are check-in sites like FourSquare and sites that somehow involve sharing things whose purpose remains somewhat difficult to figure out (such as Pinterest). If you have to ask, go find a teenager. They’ll explain it to you.

A typical and completely unscientific post-mortem of MySpace (which, shockingly, still exists) goes like this: The site was popular, and its famous founder, “Tom from Myspace,” cashed out to the tune of vast sums of wealth. (Rumor has it that Tom Anderson is still swimming laps around a Scrooge McDuck money bin filled with Krugerrands.) Thereafter the site began hemorrhaging members, everybody realized that MySpace pages were impossible to format in any way that didn’t look stupid, and the folks in charge tried to reinvent the site as a music-and-bands networking hub that was met with a resounding lack of interest. Today, few people are willing to admit to having had a blog or a page on MySpace. Most of them are now on Facebook.

Epitaphs for MySpace were circulating widely in 2011 and as early as 2010. The endless and irritating pop-up ads, the horrible interface, the terrible graphics – these all amounted to what Wesley Verhoeve called “killing the user experience.”

“In August 2006 MySpace signed a massive $900 million deal with Google,” writes Verhoeve . “In exchange for that tidy little sum of money, MySpace let Google power all search across the site. MySpace had to make certain search page view requirements happen to keep the deal going, and they managed to hit those marks by … cheating. They have destroyed the user experience and monetized the site into oblivion.”

Marketing Week’s Lara O’Reilly offered more sweeping criticisms. “The site was slow to innovate,” she explains, “had no real understanding of itself as a brand, held minimal financial control and seemed unable to keep up with its ever-aging audience.” She pins the collapse of the once enormous social media site on a lack of loyalty to its users (the site failed to keep pace with its aging user base, which migrated to Facebook), the aforementioned failure to innovate (and did an awful job when it did redesign its interface), and on its management’s clueless approach to both the site’s fundamental nature and its long-term sustainability.

By contrast, social media giant Facebook now commands incredible influence in the United States. More than 128 million users – a staggering 40 percent of Americans – browse the site every single day. This announcement corresponds to new user metrics that focus on real-time data, rather than active users per month.

Mashable’s Kurt Wagner writes, “Facebook [called the old 'monthly active users' metric] an ‘old way of looking at the media world,’ according to an email sent out to the media. It makes sense that Facebook is beginning to move toward real-time user data, especially with video ads slated to launch on the site sometime later this year. … [Morgan Stanley predicts] the future Facebook video ad market will surpass $1 billion next year, and could reach as high as $6.5 billion by 2020. The 2014 prediction, should it ring true, would constitute roughly 1 percent of the country’s entire television advertising market. … [A]dvertisers need to know how often people are using the site, and ideally, what demographic they can expect to find. [The use of real-time metrics is] a step in that direction.”

Social media is also helping to kill the old discussion forum/bulletin board approach to online chatting. More users than ever access social media through their portable wireless devices. They’ve found different ways of interacting that gratify them faster. The old bulletin-board-and-forum model is slow by comparison. Modern, on-the-go interactions make the UseNet look positively prehistoric.

There’s a lesson behind all this. You know that social media exists for one reason, and it’s not to keep you connected to your high-school graduating class or your grandmother. Social media exists to sell you things, and the more information it gathers about you, the more effectively it may sell to you things you will actually want to buy. There is nothing sinister about this; it is simply the profit motive applied to targeted marketing. There is no more fundamentally American act than trying to identify who will buy your product and then persuading those people to give you their money.

This is also the source of anticipation and angst alike when it comes to the rise and fall of social media. When MySpace can be sold for hundreds of millions of dollars, then see its value fall to single digit percentages of that lofty sum, the prospects for investment in such networking give even the hardiest capitalists pause. If investors won’t invest, sellers can’t sell, and if sellers can’t sell, buyers can’t buy. It’s all pretty simple. It’s only too bad that every business model about social media and social networking is utterly wrong.

Social media is the ultimate self-fulfilling prophecy. People join a social network because people have joined it. Your grandmother and your high-school classmates of 20 years ago didn’t join Facebook for its elegant user interface or its adaptability to customer demographics. They joined because a bunch of people they already knew were on it. They joined because people were already there and they didn’t want to be left out. People abandoned MySpace for the same reason: Because people were leaving it.

In all social media there is an element of herd mentality, of peer pressure. The slightest hint of a migration will ultimately cause the migration predicted, to or from the site in question. This defies all rational business analysis … and it always will.

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