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More Evidence of Facebook Fatigue

Latest numbers from developed markets aren't good


If there’s one thing Facebook (NASDAQ:FB) has never had a problem with, it’s attracting users. The social networking now has more than 1 billion of them, and for the most part, they like to keep coming back to the site every day.

But lately, rumors have been buzzing that Facebook is losing its “cool” factor and could even be experiencing a slowdown in user growth.

Just look at a recent piece from The Guardian. There are some interesting data points — referencing analysis from Social Bakers (a social analytics firm) — that show big problems in developed markets.

During the past six months, Facebook has lost 9 million monthly visitors in the U.S. and 2 million in the U.K. Other reports — such as from Jefferies, comScore and Nielsen — also highlight declines in key markets, especially in North America and Europe.

This could be temporary. After all, Facebook has been investing heavily in its mobile platform, which may help to recapture users. There has also been a revamping of the web presence, such as better search capabilities and improved photos (Instagram also continues to show lots of momentum).

Oh, and there are still opportunities in emerging markets. That’s probably why Facebook has been laser-focused on Google’s (NASDAQ:GOOG) Android, which has a strong footprint in Asia.

For the most part, it seems unlikely that the company will implode like a Friendster or MySpace. Too many people have invested too much of their time and digital assets on their Facebook profiles to let it crash and burn completely.

But then again, the company could easily stall — indefinitely. That’s what happened with other platforms like Yahoo (NASDAQ:YHOO) and AOL (NYSE:AOL): Simply put, they weren’t able to maintain their innovative ways.

Facebook seems to be suffering from the same problem. Can you name one super-cool thing the company has done during the past year? If anything, Facebook has been mostly reacting to its competition, and the results have been lackluster. The Poke chat app has been a dud, and even Home appears to be shaky at the onset.

This Thursday, we’ll get more details on what’s happening at Facebook as it reports its Q1 results. For the most part, investors will focus mostly on how the company’s mobile efforts are coming along. But they also might want to get a sense of the user growth.

If growth really is deteriorating, it’ll be yet another thing for investors to be concerned about.

Tom Taulli runs the InvestorPlace blog IPO Playbook. He is also the author of High-Profit IPO StrategiesAll About Commodities, and All About Short Selling. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.

Article printed from InvestorPlace Media,

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