Shareholders pushed Facebook’s stock up slightly last week after reassuring comments from CEO Mark Zuckerberg. In the process, they overlooked a significant decline in two key areas reported by comScore: U.S. desktop usage, where Facebook has traditionally sold most of its ads, is down 12% among younger users (12 to 24 years old), who have always been seen as Facebook’s core users. Could Facebook be heading into a MySpace-like dive?
Dayne Shuda, founder of the content service Ghost Blog Writers, isn’t waiting to find out. Nor is he waiting to see which social network will be billed as “the new Facebook,” asFacebook was billed as the new MySpace in 2008.
“If the last ten years have taught business owners anything, it’s that social media entities come and go,” Shuda said. “It’s too risky to build an audience on a social media website only to see that site go bye-bye. It’s better to put in the work to build your own audience on your own platform and use social to acquire an audience.”
Both MySpace and Facebook started with a core audience and did well focusing on a few key offerings: music and collecting friends for MySpace, and the newsfeed and photos for Facebook. Both faltered when they started to focus on too many offerings, and each faced even greater pressure when a powerful force came along to upend its business model.
For MySpace, that big player was Facebook. For Facebook, it may be the mobile revolution. Despite rave reviews of its recently upgraded iOS app, many observers see Facebook’s jump into mobile as too little, too late.
“MySpace failed to change and Facebook, while it still has a chance, seems to be doing the same thing,” Shuda said. “They’re stuck in the desktop world.”
Facebook As A Third Rail For Startups
Bob Gilbreath, founder and CEO of Minimum Viable Concept Test, which consults with startups, said he sees waning interest in big, general social networks. Users are reevaluating their own social media use at a time when Facebook is focusing more on advertising, which has a disenchanting effect on users.
“Facebook integration is becoming a net negative for startups,” Gilbreath said. “In our testing, many startups describe how people can ‘register with Facebook,’ which is meant to convince people that it is simple to try a new service or app. On average, about 10% of survey respondents specifically call this the main thing they dislike about a startup idea. People respond with comments such as ‘I don’t want to share this on Facebook’ and ‘I’m barely on Facebook any more.’ Meanwhile, integration with Facebook is almost never mentioned as a positive feature.”
Gilbreath sees some disillusioned Facebook users moving to Twitter, but on the whole, younger people seem to be pulling back from social sites across the board. Use of Foursquare and Path is flattening, while other startups, including Color, Highlight and Glancee have seen their hype fizzle.
“College students are wiser about social sharing,” he said. “They are generally pulling back on what they share and who they share with, preferring to text a photo to a single person versus dumping hundreds of party pics on Facebook.”