Home Business News The five big threats that could KILL Facebook

The five big threats that could KILL Facebook

by LLB Editor
3rd Feb 15 4:56 pm

As the world’s largest social network celebrates its 11th birthday

1. Youngsters unfriending Facebook

Facebook dislike button

At a time when everyone from your mum to your dog has a Facebook account, Facebook has lost its cool quotient among youngsters.

There are stats to back that claim. According to market research group eMarketer, Facebook will see “almost” no new 12 to 24-year-olds joining the social network between now and 2017.

The research predicts that the number of UK Facebook users aged 18 to 24 is set to fall from 5.1 million to five million by 2018.

In November 2014, a study by GlobalWebIndex (GWI), based on interviews with more than 170,000 internet users across 32 markets, found that 50% of American and British Facebook users logged onto the social network “less frequently than before”.

While 45% of them said they were simply less interested, 37% say they’re “bored with Facebook”. Also, 18% said that Facebook isn’t as cool as it used to be.

So why are youngsters unfriending Facebook?

Dr Paul Marsden, consumer psychologist at SYZYGY Group, says Facebook doesn’t appeal to youngsters as well as it used to.

“In interviews with younger ex-Facebook users, three reasons are usually given for moving on from Facebook,” he explains. “First, Facebook’s cool factor died when parents or worse, grandparents, started using it.

“Second, Facebook offers better apps – Instagram and WhatsApp – better suited to the needs of this generation. With Instagram and WhatsApp, there’s less risk of being stalked or embarrassed by ‘coffin-dodgers’ – as one young ex-Facebook user delightfully once put it.

“Thirdly, we’ve found that people increasingly say there are too many annoying ads in Facebook feeds, whereas alternatives offer a less interruptive experience.”


2. Privacy gripes

Unhappy computer laptop man depressed technology

When it comes to Facebook’s privacy policy, change is the only constant. In fact, it changed its social media policy again just last week.

Under the new changes, users in Europe will now have to allow Facebook’s partnered advertisers to use personal data to produce targetted and tailored adverts. So basically, Facebook will now be able to collect information from not only within the social network, but also from its partner apps you visit.

Facebook’s new privacy policy states: “We receive information about you and your activities on and off Facebook from third-party partners, such as information from a partner when we jointly offer services or from an advertiser about your experiences or interactions with them.”

Robert Kaye, founder & CEO of open music encyclopedia MusicBrainz, says the constant changes have led to people losing trust in Facebook: “Facebook missed out on an opportunity for its users to trust the service.

“Facebook users are wary of the constantly changing service and it’s constantly changing privacy policy. This has led to general distrust of the service and people are only using it because it fulfils one of their uses.

“Kids have traditionally used it to communicate without oversight from parents. Adults use it to stay in touch with each other, and the seniors have been dragged along by the masses.

“No one seems loyal to Facebook — they are loyal to its utility. But when this utility is endangered, users are quick to find alternatives.

“The youngsters are leading the charge — with parents encroaching on their space, they seek out alternative spaces. This presents a significant danger to Facebook; when the utility for a user base disappears, so do its users,” he said.

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3. Facebook is struggling to keep up with younger rivals

The Snapchat icon

Out of the eight biggest social networks globally, Facebook was the only one to see a decline in active usage during 2014, according to research from GWI.

From Snapchat to Tumblr, Facebook’s younger rivals are attracting a mega following. As of now, they might not have the same financial health or technological strength as Facebook, but they are catching up.

Facebook can afford buy up younger rivals, like we saw in the case of Instagram and Whatsapp, but there will be always some – like Twitter – that will not relent.

Jason Mander, head of trends at GlobalWebIndex, says: “As one of the oldest networks on the block, Facebook is struggling to keep up with its younger rivals – especially as the social networking landscape is now so much more diverse and competitive than it was back in 2004, when Myspace was the only real alternative.

“Fresher, trendier and more specialised services like Pinterest, Tumblr and Instagram all recorded huge increases, while in the app space, Snapchat’s soaring popularity among teens shows no sign of abating. In fact, it’s now at parity with, or ahead of, Facebook Messenger and WhatsApp in some key markets.

“That’s the core of the problem for Facebook: 10 years ago, it was the site that any teen wanted to be on; now, Facebook has become the opposite – it’s lost a serious part of its appeal among young users who are spoilt for choice when it comes to alternatives.”


4. Does Facebook advertising work?

In 2012, General Motors pulled $10m of its advertising on Facebook, days before the social network’s IPO.

This led to mass speculation ov
er whether Facebook’s advertising actually works.

Come February 2014, Derek Muller, owner of science and tech blog Veritasium, published a video on YouTube titled “Facebook fraud”. It got over three million hits.

In the video, Muller explained: I know first-hand that Facebook’s advertising model is deeply flawed. When I paid to promote my page I gained 80,000 followers in developing countries who didn’t care about Veritasium (but I wasn’t aware of this at the time).

“They drove my reach and engagement numbers down, basically rendering the page useless.”

BBC technology correspondent Rory Cellan-Jones conducted a similar experiment in 2012. He ran a “very successful small business via Facebook” called VirtualBagel, which more than 3,000 people “liked”. VirtualBagel sent photos of bagels to users or, as Cellan-Jones’ described it, did “absolutely nothing”.

Monetising has always been a big threat for Facebook.

Enlisting the various threats to the social network at the time of its IPO, Facebook wrote in its SEC filing:

“We may not be successful in our efforts to grow and further monetize the Facebook Platform.”

Here’s the full blurb from Facebook…

“We have made and are continuing to make major investments to enable developers to build applications (apps) and websites that integrate with the Facebook Platform. Existing and prospective Platform developers may not be successful in building apps or websites that create and maintain user engagement. Additionally, developers may choose to build on other platforms, including mobile platforms controlled by third parties, rather than building on the Facebook Platform. We are continuously seeking to balance the distribution objectives of our Platform developers with our desire to provide an optimal user experience, and we may not be successful in achieving a balance that continues to attract and retain Platform developers. From time to time, we have taken actions to reduce the volume of communications from apps to users on Facebook with the objective of enhancing the user experience, and such actions have reduced distribution from, user engagement with, and our monetization opportunities from, apps on Facebook. In some instances, these actions have adversely affected our relationships with Platform developers. If we are not successful in our efforts to grow our Platform or if we are unable to build and maintain good relations with Platform developers, our user growth and user engagement and our financial results may be adversely affected.”


5. Costly failures


Another factor that may sink Facebook’s boat is its costly failures.

Take Facebook Home, for example. It was designed to be a replacement for the existing home screen on an Android device.

But it flopped. Big time.

Zuckerberg admitted that it was a big mistake. In an interview with The New York Times, he said:

“With Home, the reception was much slower than we expected. But it was a riskier thing. It’s very different from other apps, let’s say Paper or Messenger. For those, you install it, and if it’s useful you’ll go back to it and use it. Home is your lock screen. When you install it, it’s really active, and if it does anything that you don’t like, then you’ll uninstall it.”

In 2013, Facebook tried to take on Google by launching Graph Search, a map-cum-search tool that answered questions like “Which friends do X person and Y person have in common” and “which places did I visit?”.

The tool was faulty and Zuckerberg confessed to Bloomberg BusinessWeek that it was “generous” to suggest that Graph Search worked “even half the time”. However, Facebook hasn’t axed Graph Search though, it is only available to limited users.


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