Facebook's US user growth slows to a crawl
Are the social network's best days behind it?
ComScore estimates Facebook attracts about 158 million unique visitors. The U.S. population is about 300 million, which means everyone who is interested in having a Facebook account already has one, or maybe two or three. The bad news doesn't stop there.
As The Wall Street Journal notes, people are spending less time on Facebook. Users each spent more than six hours on the site in April, which was a gain of 16% from the year before but considerably less than the 23% increase in 2011 and the 57% jump in 2010. This figure is known as user engagement and is critical for website owners because the longer someone stays on a website, the higher the odds he will notice an advertisement.
But Facebook's days of growth are not over. The company has yet to fully exploit the potential for mobile devices, and, General Motors (GM) notwithstanding, advertisers have only scratched the surface of Facebook's ability to promote brands. Nonetheless, those are long-term issues. Investors accustomed to triple-digit gains from highflying tech IPOs are demanding that the company reverse its slowing growth in the U.S. -- its largest market, which accounted for 56% of Facebook's 2011 ad revenue of $3.1 billion.
One way Facebook may address this situation is by allowing users under age 13, who are currently banned from the site, to have pages. The site argues that many underage kids are on Facebook anyway because they lie about their ages. Parents are understandably concerned because of the company's often lackadaisical attitude toward user privacy. Facebook counters that children's pages would be protected by being joined to their parents' accounts. Whether that idea will work remains to be seen.
Facebook's bigger problem is relevance, which is more serious and harder to solve. I have noticed that some of my Facebook friends are posting less frequently than they used to. Maybe they are busy, or perhaps they have realized that the world doesn't always care about the cute new outfits they recently purchased. The fact that many people's parents -- including mine -- are on Facebook doesn't help matters.
Sites such as Yelp (YELP), which went public earlier this year, and Twitter, which has held off on selling shares to the public, are stealing Facebook's thunder. Like Yahoo (YHOO) and AOL (AOL), Facebook will find it hard to be all things to all people. Facebook CEO Mark Zuckerberg has repeatedly said the company is managing for the long term, which means he doesn't worry about the volatile swings in the company's stock price. That's reason enough to avoid the stock.
Jonathan Berr does not own shares of the listed companies. Follow him on Twitter@jdberr.
Ask the kids (13-30). FB is OVER. O-V-E-R. They are waiting for the next thing. And the novelty has worn off for the older kids too. FB is tedious, a chore to keep up with, and invasive.
The next Big Thing was going to be InstaGram (shorter, sweeter, faster, more fun) but FB was sneaky, saw the threat, and cleverly and quickly swallowed it.
Problem is, there is a newer, better, cooler InstaGram just around the corner.
PS: FB users---do you know how bad you have been scammed out of your private information so you can be packaged, marketed and sold? God forbid you have ever posted anything controversial or even anything that makes you look dumb, silly, wild, or unmotivated. Because after your Dream Job interview (in 5 years) the HR Dept is gonna find it , and guess what---the boring dude/chick in the cubicle next to you with "no life" that didn't post and has no damaging online cement footprints is gonna get it.
PPS: Stock price by the end of the year: Under $10/share as advertisers jump ship and the perpetual, pyramid scheme-like need to add subscribers that don't click on ads or buy products (read: marketing information to sell) slows to a trickle.
"One way Facebook may address this situation is by allowing users under age 13, who are currently banned from the site, to have pages."
In other words, we’ll do anything to make money. So much for Facebook’s charitable efforts to save the children. I guess that was all just pre IPO hype too. They want to capture the minds of their users at the earliest possible age, when it’s easiest to manipulate them. In the end, that’s all that really matters to Facebook; channeling as many people as possible into their virtual world under their control. What next; are they going to lobby all the hospitals to allow them to flash their logo ten times in the face of every newborn the first time they open their eyes? I can hear their argument now; There will be plenty of time for the babies to see their mother’s face later; you know, on Facebook.
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