The headline in
The Guardian UK
, says it all: "Facebook (NASDAQ:
) loses millions of users as biggest markets peak"
It's a fact that Facebook has lost users and independent data
suggests the reason is that alternative social networks are
attracting those users as they seek out new places to communicate
Facebook remains the most important social network for U.S.
teens, but Twitter is gaining, according to
March 2013 teen survey. Survey results suggest that among U.S.
teens, 33 percent rank Facebook number one, with Twitter coming
in a close second place with 30 percent.
This represents a change from the fall 2012 survey that had
Facebook at 42 percent and Twitter at 27 percent. Instagram came
in at 17 percent in the latest survey compared to 12 percent in
While this is ultimately a long-term problem for Facebook,
according to Gene Munster, senior analyst at Piper Jaffray,
Facebook owns Instagram, so the two could be viewed collectively.
Cue Facebook collective sigh of relief. For now.
According to new media specialist Ian Maude at Enders
Analysis, "The problem is that, in the US and UK, most people who
want to sign up for Facebook have already done it."
Maude points to what he calls a "boredom factor" with Facebook
in which people want to try something new. And teens aren't
exactly excited about their parents sending them a friend
"Is Facebook going to go the way of MySpace?" he asks, adding,
"The risk is relatively small, but that is not to say it isn't
Twitter isn't the only contender for a piece of the Facebook
action. Mobile phone-based social networks, like Path, are also
in the mix. Path, for example, founded by former Facebook
employee Dave Morin, is gaining a million users a week, and has
only just recently topped nine million - and counting.
Facebook does its own tracking as well and says much of the
problem has to do with the fact that time spent sitting in front
of computers is declining as people switch screen time to
smartphones and tablets.
Investors will be anxious to hear how Facebook plans to
respond to this mobile reality Wednesday when it reports on its
performance for the March quarter. Shareholders will be
particularly interested to learn how fast Facebook's mobile user
base is growing, and whether advertising revenues are increasing
at the same rate.
Facebook founder, Mark Zuckerberg, keenly aware of the need to
pay attention to the mobile market, has begun a series of
initiatives over the past year designed to appeal to smartphone
users. The most significant is Facebook Home, which consists of
software downloaded on to certain Android phones to feed news,
photos, and advertising directly to the user's home screen.
At the time of this writing, Jim Probasco had no position in
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
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