Facebook loses users in the US, UK – what does it mean?

Facebook has had a meteoric rise – but there are some signs that the growth is slowing:

Fearing for their privacy or perhaps just bored with using the site, 100,000 Britons are said to have deactivated their accounts last month.

And Facebook fatigue seems to be catching. Six million logged off for good in the U.S. too, figures show.

Worldwide, the rate of growth has slowed for a second month in a row – and as it aims to reach its goal of one billion active users, Facebook is having to rely on developing countries to boost its numbers…

‘By the time Facebook reaches around 50 per cent of the total population in a given country, growth generally slows to a halt,’ [Eric Eldon] explained.

This article is rife with speculation: users could be upset with privacy, people could be fatigued or bored with Facebook, etc. Here are a few of these scenarios with my own thoughts:

1. There are only so many people in the world who will use Facebook anyway. It requires using the Internet consistently, whether this is by computer or some mobile device. While it may be “normal” for the younger generations (though the user rate is not 100% here either), it is used less by older generations (even though there has been growth among these sectors). I wonder what sort of saturation point Facebook itself predicted.

1a. Is it really a big deal if Facebook’s growth is now concentrated in developing countries? Is this really any different than many other American companies?

1b. Perhaps we have entered Facebook’s “mature” stage where they can no longer coast based on word-of-mouth and spectacular growth and now need to fight for new users. How long until we see Facebook TV ads trying to entice new users?

2. The article suggests the novelty of Facebook might be wearing off. Perhaps it doesn’t have enough new features – even though the changes in recent years have induced much hand-wringing, it really hasn’t changed that much. Perhaps it has too many people on there and is no longer exclusive enough – this point was driven home by The Social Network as the Winklevoss’ started with a plan to capitalize on the exclusivity of Harvard.

2a. I wonder if Facebook itself is happy with the progress it has made. On one hand, it could generate a lot of money based on targeted advertising. On the other hand, there is some evidence that Zuckerberg wishes it was much more open than it is now. Even though there are no more networks, many people are still tied to friends and acquaintances and don’t wander too far beyond this. How do you connect these newer users around the world to established users or would this be a no-go among users?

2b. The day-to-day novelty of the product should consist of what one’s friends add to the site. Without interesting status updates, pictures, news, and more, what else draws users? Farmville? Making a “friend” connection is one thing – but this is not too interesting if neither side adds new information. So beyond vanity, how can users be provoked to add more?

3. I don’t really buy the privacy argument. Some people are concerned but they are concerned about privacy in a lot of other places as well. If people were really worried about privacy, there would be a lot of things that they wouldn’t do on the Internet, let alone Facebook.

4. Perhaps some people are interested in the story of Facebook losing steam. After all, a narrative where Facebook keeps rising might not be that interesting. How long until we see more stories about competitors to Facebook, like Twitter in the US, or Orkut elsewhere?

5. These numbers regarding the loss of users have no context: how do they compare to similar figures from previous time periods? Is this an increase in the number of users who have left? Certainly, not all users have continued with Facebook after joining.

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