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Earlier this year, interest in the social media and technology sector was incredibly high. Many investors hailed the new publicly traded companies as the next generation of the internet, so called ‘Web 2.0’ firms (read Three ETFs to Play the Tech IPO Boom).

What a difference a few months can make.

Now, many companies that have recently debuted in this space have seen floundering stock prices and some big investors are calling for the heads of CEOs who are in charge of these struggling firms. Seemingly the only one that is doing well this year is LinkedIn (LNKD - Analyst Report), a firm that arguably received less press than almost any other in the space, but has added a robust 67% YTD.

Instead many in the media have been focused in on the many losers in the space such as the following companies:

What happened to this once vaunted sector? Will these companies survive or are the doomed to fall in short-order?

Personally, I think the bubble just popped for much of the space, and with a weakened economy, no one was willing to bet on the uncertainty that comes with many of the names listed above. With that being said, of the five listed losers, I think FB probably has the best long-term promise (with its enormous user base) although Pandora could be an interesting play as well, especially if they go further into the automotive market (read The End of the Social Media ETF Nightmare?).

Meanwhile, I think Zynga could have some more short-term troubles given its weak product lineup and the fact that the company is being sued by rival EA. This could put even more pressure on ZNGA, particularly given some of the near-term troubles that their partner (Facebook) is facing…

What do you think? What is the best of the worst in the social media sector?

Let us know your thoughts in the comments below!

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