Axel Schultze* is a respected social media commentator. In a penetrating article in this week’s issue of CustomerThink he confirms what I’ve suspected for a few months now: that the social media bubble, like other bubbles over the past decade, is about to burst. The tell-tale warning signs are all there if you know what to look for.

People are recognizing already that the endless hours of watching the incoming streams from Twitter and Facebook or all the status updates on LinkedIn are hours wasted. All the paid tweets and people or agencies, who have been hired to tweet are not going to contribute to the bottom line. And the fan pages people build to get “fans, followers, connections” are just hopes that it will do something for the business – but it won’t.

Yet, there are businesses who not only survived during the economic down turn but actually showed significant growth. What did they do differently as most are also associated with the rise of social media? The answer is SO SIMPLE that most people will reject the truth and continue to look for the holy grail. The answer is “They become more social with their customers”. Socializing is work, it takes time and focus, discipline and a clear understanding [of] what to do and what not to do. And as 80% of humans continue to look for getting the job done automatically and get rich instantly, they will leave the social web because they just learned again and again – there is no free lunch.

He’s no harbinger of doom and gloom, however. There’s plenty to be optimistic about, provided you do the right things for the right reasons.

The biggest benefit of social media is to do more business with more people in a grander geography and in less time than ever before. But it comes at a price. And the price you pay is to be more open, more social, more connected, more interactive, more helpful and more conversational than ever before. And that means you cannot much longer be busy just slicing and dicing your data and aggregate information for even more knowledge about your demographics or aggregate more information to even better target your mail shots and advertising – NO you got to get out there and have a dialog with your customers. No time to do that? You will have a lot of time to think about it when you are fired or your business ceased operations. Being social is work – one customer at a time.

Can you automate?
Automation is sand in the social gearbox.

If you’re interested in social networking as the new Holy Grail of MLM prospecting and recruiting, it will pay you to read this article first before doing anything else — especially spending your money on some of the over-hyped, over-priced social networking courses currently on offer.

If you’re familiar with my 2007 Insight Report, “What the ‘Gurus’ WON’T Tell You! Facts, Fallacies, Fantasies, Fables and Falsehoods of Internet Marketing” (How to separate the ahah! from the rah-rah, ga-ga and ca-ca), this will all sound discouragingly familiar. If you’re not familiar with it, click here to learn more. (Scroll down the page.)

* Social media practitioner, CEO of Xeesm, founder of the Social Media Academy, Silicon Valley entrepreneur, book author of “Channel Excellence”, frequent speaker at industry events, and winner of the 2008 SF Entrepreneur award.

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