Facebook & Co.: Do They Have A Future?
The biggest social media networks – Facebook and Weibo – are beginning to lose ground. We ponder if they are headed the MySpace way, to digital obscurity …
Remember MySpace? No one will blame you if you don’t. Social networking sites have always had a tendency to bloom, peak and disappear.
MySpace was one of the first big things in social media. But from its 2008 peak, it has unceremoniously disappeared. A platform that had 300 million users at one point, now barely even evokes recognition beyond mocking laughter. It was not so much about MySpace keeping up with the times as it was about people just getting bored of it and moving on.
There is one eternal truth in social media: Eventually, your current favourite social media won’t matter anymore. And by that point, you will already have a different favourite social media. MySpace personified this. A company acquired by NewsCorp for $580 million, at one point valued at $12 billion, ended up being sold off for just $35 million.
Life after MySpace – The Facebook and Weibo Era
Facebook filled in the void left behind by users deserting MySpace. Aided by a burgeoning global smartphone and tablet phenomenon, Facebook rapidly surpassed MySpace’s milestone. Simultaneously, Weibo – an ingenious social media platform that combines the functionalities of Twitter and Facebook, began to rapidly capture the Chinese market.
In October 2013, Facebook reported 1.2 billion active users. Around the same period, Weibo showed that it had 600 million registered users. The numbers are truly remarkable. Facebook’s successful IPO flotation cemented its place in tech history. Even a significant drop would still leave them quite high up the social media ladder. The aura of invincibility was evident.
And then, this happened. Princeton University published a report titled ‘Epidemiological modelling of online social network dynamics’.
Imminent downfall – Likely or Hyperbole?
The Princeton University report, based on a model of ‘infectiousness’ drew parallels between virus cycles and social media networks. The report predicted that users will soon become immune to Facebook’s offerings after they pass this phase of attachment. The result of this study was a prediction that Facebook would lose 80% of its users by 2017.
Is this forecast of doom warranted? If share prices are an indication, the fall seems unlikely. Facebook’s share prices are at an all-time high hitting $58. Shares, though, have traditionally followed the fate of a company in the long-term. Facebook has long been diversifying its operations, much like Google, to stay on top of the game. It would take a lot more than just a drop in registered user numbers to knock Facebook off its perch.
But if this gloomy prediction is merely user activity related, Facebook could lose much of its reason for being social media networking. If Weibo’s descent is anything to go by, the likelihood of user boredom is highly probable.
Last week, the China Internet Network Information Center reported that Weibo had lost almost 28 million users in one year to the end of 2013. And if the statistics are anything to go by, the desertion seems likely to continue.
The ‘App’ threat
The biggest threat to traditional ‘big’ social media, unlike in the past, is new competing social media. It, in fact, is mobile social media. Mobile apps designed with the specific purpose of quick and cheap communication are taking the market by a storm.
The app impact has been so strong that they are starting to deal a severe blow to traditional SMS networks. Telecom majors earned $120 billion globally from offering SMS in 2013. They forecast this number to fall to $96 billion in 2018 despite growing mobile penetration worldwide. From WhatsApp to Viber to WeChat, the user base of chat apps have grown from zero to over half a billion within a few years. WhatsApp now has almost twice the number of users as Twitter.
The evolution of interactive social media platforms is constant. Their evolution helps us connect and network better. But, like all good things, they have a shelf life.
Will Facebook and Weibo manage to buck the trend of fading into obscurity, unlike most social media platforms? It’s hard to tell. But, perhaps, their survival would be next to impossible without a continuous diversification of their services. If they fail to diversify, their MySpace-esque fates would be inevitable.
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<Principal image courtesy of Jason A. Howie/Some rights reserved>