Has Facebook Peaked?

To be clear, this isn’t an “Is Facebook dead?” piece. Obviously Facebook is far from dead, and has become integrated in many facets of our lives, and will likely become integrated in...
Has Facebook Peaked?
Written by Chris Crum
  • To be clear, this isn’t an “Is Facebook dead?” piece. Obviously Facebook is far from dead, and has become integrated in many facets of our lives, and will likely become integrated in more. In fact, just a few days ago, we ran a piece asking what we’ll be using Facebook for five years from now. We talked about things like payments, e-commerce, travel, search, identity, and entertainment.

    Does Facebook have a bright future, or has it seen its finest hour? Tell us what you think.

    As the comments we received on that article indicate, many people think Facebook will be around for the long haul (as opposed to experiencing a MySpace-like decline), but some aren’t so sure. Dave Culbertson, for example, says, “Facebook is basically AOL, part two on a larger scale. AOL was really about controlling content distribution and ecommerce. Companies such as Travelocity ended up paying millions of $$ to AOL to be ‘where the people are’ before they figured out that they could use the web to by-pass the AOL platform and go directly to where the most people are. Many brands jumping on the Facebook wagon will eventually realize this – again – and refocus on their websites. Do brands want to drive their own cars on the information highway or be stuck in the back of someone else’s bus?”

    Chris Smith commented, “I personally think Facebook will fail. The invasion of privacy is starting to concern everyone. Also, the figure of 700 million users is rubbish, 700 million accounts maybe, but I believe this will be less than half unique users. How many pets have accounts, businesses, people with 2 accounts. Its all publicity figures in my opinion. 1 in 10 people of the world don’t have an account in my experience. Something will beat Facebook for usability and the privacy concerns in my opinion everyone will shift to that, I’d personally give Facebook 3 years max. They will end up the same way as Yahoo, who once were huge for the internet and where are they now, really?”

    Well, actually Yahoo is still doing pretty well as far as the web is concerned. The company may have lost some of its luster in the search space, but it is still dominating in other areas. MySpace, for that matter (while clearly in decline), still had over 32 million unique visitors in April (Compete) while News Corp. looks to sell it. AOL, has had something of a resurgence, as it has become a more content-oriented company. Purchasing the Huffington Post was huge.

    But can Facebook grow forever? According to Inside Facebook, the social network ahd 687 million total users at the beginning of June, but growth is slowing. Last year, it was common for Facebook to get 20 million new users in a month. This past April, it was 13.8 million. In May, it was even less at 11.8 million. Still a lot, but not by Facebook standards.

    According to InsideFacebook, Facebook actually lost users in the US and Canada. In the US, Facebook dropped 6 million users in May, and Canada dropped 1.52 million. They also lost users in the UK and Norway, though the social network saw growth in countries like Brazil, Thailand, and Mexico.

    According to Experian Hitwise, YouTube and Twitter are “eroding Facebook’s dominance of social.”

    “In this month’s search and social analysis release we saw some pretty interesting trends in our Social Networking and Forums category, including a bumper month of traffic for Twitter, extended growth for YouTube and a declining market share for Facebook,” explains Hitwise UK Research Director Robin Goad.

    Goad points out that YouTube is accounting for one in every five visits to all social networking sites in the UK. “Meanwhile Twitter had its biggest month of traffic ever, in part because of the super-injunction revelations, but also because the micro-blogging platform has carved a niche for itself as an excellent platform through which Internet users can share and consume news,” he says. “Recent examples like the death of Osama Bin Laden, the Egypt crisis and the resurgence of the ash cloud have all been shared and discussed on Twitter.”

    “What’s interesting is that the growth of YouTube and Twitter is coming at the expense of Facebook,” he adds. “Since the beginning of 2011, Facebook’s market share of visits within the Social Networks and Forums category has fallen from nearly 58% to hover around the 54% mark.”

    Facebook Hitwise info

    “Despite the drop in market share in recent months, Facebook needn’t be reaching for the panic button yet,” Goad continues. “Although its market share is declining slightly, Facebook still commands over half of the visits to the fastest growing category online, and having a slightly smaller proportion of an ever increasing pie is still a very healthy place to be. However, it does raise the question: has Facebook now finished its growth phase in the UK, and what will a ‘stable’ usage figure look like?”

    In another recent article, we asked, “Is Twitter becoming the real alternative to Facebook?” Twitter has aggressively expanded its strategy since co-founder Jack Dorsey returned to the company, having entered the photo-uploading game and purchased popular third-party client Tweetdeck, which should mean new and interesting things for its user interface. Twitter also recently launched its “follow” button, which when placed alongside Facebook “like” buttons, could go a long way in getting people to follow brands they’re interested in and increase user engagement (just one of a handful of things Twitter has done in this department just in the last few months).

    There are still way more people using Facebook than there are Twitter, but Twitter’s numbers are growing. 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 climbs (the youth are the future aren’t they?).

    Who Uses Twitter?

    Identity (you know, login) is the real key to the castle, and Facebook and Twitter already compete here. Facebook has done an incredible job in this department thus far. People are constantly logged into Facebook, participating in all kinds of activities around the web.

    Twitter, however, while already growing rapidly in adoption, is about to become the main identity for all kinds of iPhone and iPad users. Apple’s upcoming iOS 5 operating system, powering these devices (not to mention the iPod Touch), comes with built-in Twitter integration, where you save your Twitter info, which can easily be accessed by any app. Think about the possibilities.

    More interesting still, is that it appears it was almost Facebook instead of Twitter. Alexia Tsotsis at TechCrunch shows an early build of the OS, which essentially had Facebook in the same place Twitter is set to take over.

    Mashable’s Adam Ostrow, reporting for CNN, even goes so far as to say “Twitter is the new Facebook.”

    Facebook still continues to take over the world. This is illustrated beautifully in a world map comparison between June 2009 and June 2011, released earlier this week by Vincos. But how long will this be the case?

    Has Facebook peaked, or have we yet to see just how powerful it will become? Share your thoughts.

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