A new financial report on the financial climate inside the social media world has been released and with Facebook's IPO on the horizon, the news isn't exactly the sunny sky you'd hope for if you're an investor. Zscaler, a cloud security service provider that monitors online commerce, released its State of the Web Q1 2012 report and while the forecast isn't what Facebook probably wants to hear, it's great news for Twitter.
Zscaler analyzed the transactions that people make on the web via social media and found that the traffic on Facebook declined as a percent of total social transactions. Facebook's been on a downward slip in the past four quarterly reports, dropping from 53% of transactions in Q1 2011 to 41.72% in Q4 2011, and even lower to to 40.54% this March. Facebook is still the most frequently visited site with it's 40% share of web application transactions, but the steady decline of that share could be of concern.
Twitter, on the other hand, is sitting on the ascending end of that financial seesaw. The microblogging site increased its percentage of social transactions from 7.05% to 7.44%. Zscaler postulates that a significant reason why Facebook went down and Twitter rose up is due to employers increasingly limiting the the access employees have to Facebook during work hours. For some reason, employers aren't as concerned with workers slacking off on Twitter.
Facebook wasn't the only social site on the decline, though as LinkedIn sliped from 1.55% to 1.44%.
Despite the shifting market, Facebook still commands a hefty lead over its competitors. The site maintains 40% of social transactions, easily dwarfing Gmail's 18%, YouTube's 8%, and Twitter's 7%
Given that Facebook is on track to hit 1 billion registered users as soon as August, it's a little surprising that their market share of social transactions has declined so significantly. Twitter's 0.39% quarterly increase explains a little bit of Facebook's 1.18% quarterly loss. Perhaps the newer Facebook users aren't as keen on purchasing via apps on the site, or it could be that, as a whole, users are feeling a little over-saturated with the amount of ads and promoted stories that fly at you every time you log in to the site.
If the latter is the case, that's some chilly news for the social networking site ahead of it's IPO dog and pony show that's coming up.[Via eWeek.