How Will These New Developments Impact Facebook’s Dominance?
Last week, we ran an article about the future of Facebook, discussing what we might be using Facebook for in five years, including things like search, e-commerce, travel, identity, payments, movies, music, etc. This week, we followed that up with a piece asking if Facebook has peaked. This was based on a handful of studies that showed slowed growth for the massive social network, while Twitter adoption is on the rise. Since then, some more things have come out that can give us more clues about where Facebook is headed.
Can Facebook dominate forever? Share your thoughts.
Shrinking Word of Mouth?
First off, YouGov BrandIndex tells WebProNews, our previous article on Facebook “peaking” inspired some research, which found that Facebook’s word of mouth has been declining since the beginning of the year among adults 18 and up. This “may create some potential investor concern as the company considers its IPO,” the firm says, adding:
While Facebook is still very well positioned in its space, there is other evidence that points to potential challenges ahead. According to Inside Facebook Gold data service, while Facebook is approaching its 700 million user goal, most of the gains have been from countries who adopted it later than North America. Growth numbers have recently slowed down and the United States lost 6 million users in May alone.
Facebook’s word of mouth was measured by YouGov BrandIndex using its Buzz score, which asks respondents: “If you’ve heard anything about the brand in the last two weeks, through advertising, news or word of mouth, was it positive or negative?” YouGov BrandIndex’s measurement scores range from 100 to -100 and are compiled by subtracting negative feedback from positive. A zero score means equal positive and negative feedback.
ADULTS 35 – 49
January 3 score: 28.5
June 13 score: 10.4
ADULTS 18 – 34 (which historically have the highest perception of the company)
January 3 score: 36.2
June 13 score: 22.8
“Facebook’s perception gap between men and women began widening in mid-January, with men’s numbers tumbling throughout February,” the firm says. “Only a small amount of that loss was regained through the spring until early June, when the numbers declined again.”
January 3 score: 22.1
June 13 score: 7.8.
Facebook Credits, which are essentially the company’s own currency, which one could envision becoming a viable way to pay for goods online and off, with the advent of mobile payments, have gotten a major boost from the company with the announcement that Facebook is introducing international payment methods and improved payout workflows for developers who use Facebook Credits. With these improvements, Facebook can support developers in “virtually all countries.”
Facebook’s Loren Cheng wrote on the company’s developer blog:
Starting around July 1, we’re adding alternative payment options for Facebook Credits in 13 countries in Asia and Latin America. Those payment options are supported by Live Gamer. A list of current Facebook Credits payment options is available here.
We’re also excited to announce that we now support payouts to developers in all countries globally (excluding a few government-embargoed countries). To do this, we’ve developed a new pay out process for developers in countries where we haven’t previously supported payouts through banks or PayPal. For developers in these countries, we may request some additional documentation to enable them to be paid through their local bank account.
Keep in mind that international growth has been booming for Facebook, even as it has slowed in markets like the US, Canada, and UK.
Facebook to Dig Into Mobile Even More
MG Siegler at TechCrunch was able to obtain some very interesting findings about Facebook’s alleged plans that involve taking on an unlikely rival on its own magical turf. I’m talking of course about Apple. Siegler writes:
As we understand it, Project Spartan is the codename for a new platform Facebook is on verge of launching. It’s entirely HTML5-based and the aim is to reach some 100 million users in a key place: mobile. More specifically, the initial target is both surprising and awesome: mobile Safari.
Yes, Facebook is about to launch a mobile platform aimed squarely at working on the iPhone (and iPad). But it won’t be distributed through the App Store as a native application, it will be entirely HTML5-based and work in Safari. Why? Because it’s the one area of the device that Facebook will be able to control (or mostly control).
Facebook clearly already has its tentacles firmly entrenched in the better part of the web, so going through the browser, as opposed to Apple’s notoriously stingy App Store, certainly seems like a wise decision.
It seems even wiser when you take into consideration the following points:
- Twitter is set to become the default ID for many iPhone, iPad, and iPod Touch users, with the release of iOS 5
- Facebook Credits could eventually become a common way of paying for things using mobile in the physical world.
- Apple has a history of rejecting apps that may compete with its own offerings. Last week, the Register ran a story about Apple rejecting a student’s Wi-Fi sync app, before announcing its own functionality for this.
Separately, Siegler also obtained “roughly 50 MB of images and documents” outlining an apparently forthcoming photo sharing app from Facebook for the iPhone. He calls it “Path meets Instagram meets Color meets (Path’s new side project) With — with a few cool twists. And obviously, it’s built entirely on top of Facebook’s massive social graph.”
Twitter, of course just recently announced its own photo uploading feature.
Speaking of Twitter, as its competition with Facebook continues to heat up, it hasn’t been standing still either. A new “Follow Recommendations” feature has been unveiled, which appears to let users make lists of people they think others should follow – kind of like a blogroll, or a greatly expanded “Follow Friday”.
Twitter has also partnered with Yahoo in Japan, which is one of Twitter’s biggest international markets. The partnership will see Twitter appearing in search results over there. Add this to all of the other things Twitter has been up to, and whatever else it may have up its sleeve to become a more legitimate rival to Facebook. The company has been much more aggressive in its strategy since the return of co-founder Jack Dorsey earlier this year, who by the way, also has a firm foothold in the mobile payments industry, which could just end up being incredibly significant for all of those iPhone users using Twitter as their ID.
A recent report from Pew Internet found that 13% of adult Internet users have used Twitter (up from 8% in November), and Twitter use is spreading to a wider range of ages. Those between the ages 25 and 44 have experienced notable adoption growth since late 2010, and when you go younger, the adoption rate is higher still.
Here’s my thinking about what the future holds for Facebook. The company is going to continue to dominate social media for the foreseeable future, but it’s going to become more challenging to fend off competition. I can see parallels between Facebook vs. Twitter and Google vs. Bing (in search). One is the clear dominator, and while the other may be a distant rival in terms of market share, the “underdog” is continuing to make gains little by little, while the giant faces more and more backlash in brand perception.
Of course there are plenty of other players and factors that enter the equation, including the overlap of companies and industries (web, mobile, location, deals, email, social, search, etc.).
How long do you think Facebook can maintain its lead as the dominant social media player? Let us know in the comments.