Since 2006, the number of registered users on Facebook has seen near 100% annual growth. We estimate that the number of registered users has increased from around 10.5 million in 2006 to around 595 million in 2010 and has since continued its upward climb. From the time Facebook decided to allow any user above the age of 13 to create an account, the website's number of registered users has seen a meteoric rise.
Facebook's user base will continue to increase, but could see a slower growth rate in the years ahead due in part to its large existing user base. The growth will likely come from users in the 18-34 age group, as Facebook establishes its leadership in the social networking industry amongst competitors like MySpace and LinkedIn. Features like Facebook Connect will further boost user numbers.
While we anticipate that the number of registered users on Facebook will rise to 2.3 billion by the end of our forecast period, Trefis members expect the user count to cross 2.6 billion. The member estimates imply an upside of 4% to our $45 billion market cap estimate for Facebook.
Teens and Young Adults Will Dominate Facebook User Composition
Teens and young adults in the 18-34 age group account for a major chunk of Facebook users. The 18-34 age group comprises around 46% of Facebook users and the larger 18-49 age group comprises about 66% of the Facebook user base in the U.S. We expect user growth going forward to be driven by the 18-34 age group, as Facebook further establishes itself as the preferred medium in the social networking spectrum, with competitors like MySpace catering to teenagers and LinkedIn emphasizing business networking.
Facebook Connect Will Attract More Users
Facebook Connect is a feature that allows users to log into third party sites, applications, mobile devices and gaming systems using their Facebook profiles and post information from and to their Facebook accounts. Facebook Connect should contribute towards increased user engagement from third party websites.
Trefis Community Forecast
Trefis community members forecast that Facebook's registered user base will increase from roughly 595 million in 2010 to 2.7 billion by the end of our forecast period, compared to the baseline Trefis estimate of an increase to 2.3 billion during the same period. The member estimates imply an upside of 4% to our $45 billion market cap estimate for Facebook.