FB – 3 Moronic Reasons Why People Say Facebook Is Dying

Assuming FB is on the way out is just plain silly, and here's why

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A recent study in the UK claims Facebook (FB) is “dead and buried.” The reasoning: teens think Facebook isn’t cool anymore.

Facebook185 150x150 FB   3 Moronic Reasons Why People Say Facebook Is DyingAnd clearly, we should all listen to teenagers.

“What we’ve learned from working with 16-18 year olds in the UK is that Facebook is not just on the slide, it is basically dead and buried,” the study stated. “Mostly they feel embarrassed even to be associated with it. Where once parents worried about their children joining Facebook, the children now say it is their family that insists they stay there to post about their lives.”

This isn’t the first time someone has said Facebook is in a death spiral. There have also been reports that millions of people have left the social network in the United States and United Kingdom over the past year. And after its third quarter earnings call, where Facebook’s CFO acknowledged a decrease in teenage daily active users, the stock nosedived 15%.

Still, the theory that Facebook is going to die altogether is moronic. Here are the three most common complaints about Facebook and why they make no sense.

1. “MySpace died!”

It’s easy to compare Facebook to the social network it helped bury, MySpace. But saying “Myspace died” isn’t true. It was acquired by News Corporation for $580 million two years after it was founded. That’s a win by any startup measure. It wasn’t until 2008, when Myspace was under new management, that Facebook outgrew it.

Also, MySpace was never as large as Facebook is now. At its peak 2008, MySpace had 100 million registered users and generated $600 million.

Facebook now has 1.19 billion monthly active users and it generates more than $1 billion per quarter. It is magnitudes larger than 2008 Myspace in terms of active users and revenue, which makes it that much harder to kill.

Even people who acknowledge Facebook’s teen problem say the risk of it becoming Myspace is small.

“The problem [with Facebook] is that, in the US and UK, most people who want to sign up for Facebook have already done it,” Enders Analysis new media specialist Ian Maude told The Guardian.“There is a boredom factor where people like to try something new. Is Facebook going to go the way of Myspace? The risk is relatively small, but that is not to say it isn’t there.”

There is a boredom factor where people like to try something new. Is Facebook going to go the way of Myspace? The risk is relatively small, but that is not to say it isn’t there.

2. Teenagers don’t think it’s cool anymore.

Teenagers, particularly college students, were the first to use Facebook. To hear Facebook’s initial core users say they’re “bored” with it is startling. But they haven’t quit the social network altogether.

“The reality is there is a decline [of teens on Facebook], but it is still no. 1 [among teens in 30 out of 32 countries] and account ownership still remains at near full penetration,” Tom Smith, CEO of social media data company Global Web Index, tells Forbes.

Bored teens on Facebook make up a relatively small number of Facebook’s total users too. 

“We think the lower daily usage is currently limited to a small portion of younger teens, likely ages 13-15, that may be using additional services such as Facebook-owned Instagram, Snapchat, and Whats App,” J.P. Morgan analyst Doug Anmuth wrote after Facebook’s last earnings call.

Despite a few disinterested members, Facebook’s total active users are still on the rise. Parents and other late adopters are just started on the social network. Facebook is also taking advantage of emerging markets. In some European countries, where Facebook has quickly amassed tens of millions of users, three-fourths of monthly active users are logging onto the social network daily.

Essentially, Facebook is losing steam in one small user base (teens) but growing steadily in others (adults and emerging markets).

“From Q2 2012 to Q3 2013 the percentage of active users among 16 – 19 year olds fell from 62% to 52%,  and among 20 – 24 year olds fell from 63% to 52%,” Forbes summarized the findings of a recent GlobalWebIndex study” Now the interesting part: The percentage of active users among the 35 – 44 year old age group rose from 47% to 53%, among 45 – 54 year olds from 43% to 49%, and among 55 – 64 year olds from 39% – 45%.”


Article printed from InvestorPlace Media, http://investorplace.com/2013/12/facebook-twitter-fb/.

©2014 InvestorPlace Media, LLC

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