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.

Getting not pwned by technology

David Rowan over at the UK edition of Wired has an article about the advantages of renting out what you own:

There are assets all around us with high “idling capacity” that are essentially like an ATM machine. People use the extra cash for everything from offsetting car payments to taking the holiday they could not otherwise afford. Collaborative consumption is an easy way to become a micro-entrepreneur.

Rowan argues that the Internet is fundamentally changing the way that people think about ownership:

Now that collaborative spirit [of the sort that launched auction website eBay] is spreading to all sorts of other industries as ubiquitous internet connections bring us together in creative new ways. The peer-to-peer model has lately moved from auction houses and online classifieds to car-sharing, jewelery lending, even online banking — and each time it’s cutting out a traditional incumbent.

In an era when environmental concerns are making conspicuous consumption harder to justify, start-ups are targeting customers keener to pay for access to goods and services rather than actual physical ownership — and new web-based networks are letting all of us be both lenders and borrowers.

As the articles notes, however, such systems can only thrive within an environment of robust trust.  It’s one thing to sell a used laser pointer to a total stranger with the expectation of payment (like eBay’s first sale).  It’s quite another to open one’s dwelling to total strangers who find you through Couchsurfing.

One thing that the Wired article doesn’t address is the official legal barriers to much of these sorts of collaborative activities.  Hospitality, car rentals, banking:  these are highly regulated industries with a host of rules designed to protect incumbents by erecting barriers to entry.  While this may not be a large issue currently, it will be interesting to see how established industry players (or revenue-starved state and local governments) start responding if and when “collaborative consumption” becomes a truly major economic force.

Richard Florida cited by UK Conservatives

The Economist takes a look into the background of urban thinker Richard Florida, who has recently been cited by leading British Conservatives. Here an excerpt about Florida’s background:

Although less well-known in Europe, he is as close to a household name as it is possible for an urban theorist to be in America. In his best-selling books, highly paid speeches and frequent television interviews, Mr Florida has extolled one core idea: that the creative sector is the growth engine for Western economies as menial work migrates to developing countries.

Mr Florida’s definition of creative goes beyond the obvious artists and musicians to include anyone open to new ideas. He says businesses must give space and flexibility to these freethinkers, and that cities must attract lots of them to be successful. This means they must be green, clean, tolerant and cultured, typically with large gay and ethnic-minority populations…

His superstar status, as much as his ideas, have made him enemies. One Canadian newspaper columnist, fed up with his high profile after he became head of the Martin Prosperity Institute at Toronto University three years ago, started handing out badges that read “Please stop talking about Richard Florida”. More seriously, other academics have denounced his “snake oil economics”, his use of statistics and his confusion of causation and coincidence. Joel Kotkin, another writer about cities, points out that over the past 20 years far more jobs in America have been created in boring suburbs than in the multicultural city centres beloved of Mr Florida.

He describes himself as fiscally conservative and socially liberal.

There are some interesting things to think about based on this story:

1. How much evidence is there that Florida’s ideas can bring about a “quick fix” to depressed locations? In England, are they looking to his ideas for a quick turnaround or is this a long-term project?

2. I’ve seen and read some of this criticism of Florida by other academics. Some of it did seem based on envy of his status and money-making abilities – his books have done well, he is an expensive speaker, and he has had the ear of a number of politicians. At the same time, there are legitimate concerns about whether his ideas work in the real world. I’m particularly struck by Kotkin’s criticism as noted in this story – job growth in America has been primarily in the suburbs.

3. In another part of the story, The Economist hints that politicians who court thinkers or adopt ideologies can often be left struggling to convey or act upon these ideas. On one hand, it is remarkable that Florida gets so much attention from politicians – few academics ever draw this kind of attention. On the other hand, when social scientists and urban thinkers do have a chance to influence politics, what are the outcomes?

h/t The Infrastructurist

Getting a new passport to avoid taxes (and other reasons)

The Financial Times reports an increased number of Americans are looking to turn in their American passports at the UK embassy. The waiting list is growing apparently because Americans are looking to avoid paying taxes on worldwide income and capital gains. As the article notes, the main disadvantage is that a person may not be able to reverse their choice.

It would be interesting to know how many people do this each year. Switching allegiances from one particular country to another seems like a weighty decision.