The Crack In The Wall

How good is your memory?  Remember way back in 2008 when the biggest social network site was seeing 75.9 million monthly unique visitors in the U.S.?  It was taking in a lot of money too – upwards of $470 million back in the days when digital advertising was still relatively new.  Big user base, solid revenue performance – what could possibly go wrong?

Facebook logo Español: Logotipo de Facebook Fr...

(Photo credit: Wikipedia)

Except that things did.  By 2011 MySpace‘s revenues dropped close to $184 million and their user base was down to 34.8 million.  What happened?  At the time, this was Business Week’s take:

It turns out that fast-moving technology, fickle user behavior, and swirling public perception are an extremely volatile mix. Add in the sense of arrogance that comes when hundreds of millions of people around the world are living on your platform, and social networks appear to be a very peculiar business—one in which companies might serially rise, fall, and disappear.

Why do I bring this up?  A report came out the other day from the Magid folks.  It found that the portion of 13- to 17-year-old social-media users in the U.S. on Facebook slipped to 88 percent this year from 94 percent in 2013 and 95 percent in 2012.  This comes on the heels of

New research conducted by the GlobalWebIndex (GWI) shows that while Facebook remains the most popular social network, it now has to face the challenge of keeping users interested. Among its teenage netizens, 54 percent cited that their “log in” habits have dropped due to a lack of interest. Of users who belong to the age range of 16 to 19, 64 percent now use the site less.

Now if you own a house, you’ve probably had the experience of noticing a crack in a wall that might not have been there the day before.  Most of the time it’s just the house doing a little settling.  Sometimes, however, it portends a serious problem.  I’m not sure which this is in Facebook’s case.  I suspect it’s more serious than one might think.  Why?

Another little factoid that came out of the data.  Teens don’t see Facebook as safe.  They have concerns that the service may not be trustworthy. When just 9 percent of those surveyed described the website as “safe” or “trustworthy, they have a problem, one they’re doing almost nothing to address.

I’m sure back in 2009 the MySpace folks didn’t lose much sleep worrying about small usage declines.  I don’t expect the Facebook folks are now even as they’ve stopped talking about teen usage on analyst calls.   A little settling or a massive structural problem?  What do you think?

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