Facebook will go to IPO in either October or November this year and the company hopes the market will value it at US$100 billion. That hope may be misplaced. Figures out this very morning show that Facebook fatigue is setting in with six million erstwhile devotees in the US deserting the social networking site last month alone. Martyn Warwick reports.
It was the Swiss psychologist Carl Jung who, back in the 1920s, first elucidated the concept of 'synchronicity', wherein two or more events, apparently causally unrelated or highly unlikely to occur together by chance, actually do happen together in a meaningful manner.
I can't think of a better word than 'synchronicity' to describe what's happening with Facebook right now. For months there has been speculation that Facebook will be floated this year and that the Initial Public Offering will confer on the company the titanic valuation of US$100 BILLION or even more.
However, looking at things from the point of view of today's news that, for a variety of reasons, people are beginning to tire of Facebook and are moving on to the next fad, it seems that the valuation may be as inflated as some of the egos running the company.
In May more than six million Facebook users logged out permanently from the site while 1.45 million Canadians did the same. In the UK, 100,000 Brits deactivated their Facebook accounts. Tens of thousands of Norwegians and Russians followed suit and the same downward trend is apparent in other European nations and in several farther-flung developed countries as well.
Indeed, Facebook's global rate of growth has slowed for the second consecutive month and Mark Zuckerberg's boast that the number of Facebook users will 'inevitably' top the billion point sometime this year is beginning to look a bit threadbare. Remember he said that he will "guarantee that it will happen."
At the moment Facebook has about 700 million members, a phenomenal user base by any standards. But perhaps we should remember that Facebook is exactly that, a phenomenon, and phenomena come and then they go.
I know it feels like its been with us forever but Facebook is actually a mere seven years old (as you can tell from the infantile antics of some of its 'senior' staff) and has enjoyed a meteoric rise, but, as they say, what goes up must come down and every company, just like everything and everyone and every civilisation, has its arc of life and maybe Facebook has just passed its peak and like the Greek, Roman and British empires will now begin a long decline.
What seems to be happening is that Facebook is reaching its saturation point in the West and thus it will have to look East and to developing countries for continued growth.
Figures show that when half the number of people with Internet connectivity in any country have signed-up to Facebook, the inevitable corollary is a falling away from that peak.
So, it looks as though young master Zuckerberg will only be able to fulfill his 'billion user' pledge by getting Facebook into China - and he's been there recently, no doubt in an effort to persuade the gerontocracy that still runs the country to get down with the kids and becomehis Facebook friends.
That might not be so easy. Other Western web companies (eBay and Google for example) tried and failed both for political reasons and because the Chinese online market is dominated by the popular local players Alibaba, and Baidu.
Indeed, after a lot of big talk and bluster, Google was forced out of China last year with its tail between its legs. Why would Facebook be any more successful?
And then, of course, there's Facebook's incredible arrogance, of which the secret introduction of sinister facial recognition technology is but the latest example. Users are at last beginning to question Facebook's motives and its cavalier attitude to privacy and the confidentiality of the huge amounts of user data the company collects from them.
Now, add to that the growing perception that Facebook simply isn't cool any more and that people are ready to churn away to the next novelty coming up in the elevator and you can see that Facebook is facing a real problem.
Not that the company is going to acknowledge this anytime soon. A Facebook spokesperson said last night, "From time to time, we see stories about Facebook losing users in some regions.Some of these reports use data extracted from our advertising tool, which provides broad estimates on the reach of Facebook ads and isn’t designed to be a source for tracking the overall growth of Facebook. We are very pleased with our growth and with the way people are engaged with Facebook. More than 50 per cent of our active users log on to Facebook in any given day."
Yes, well, that's not to say they'll be there forever. Look at MySpace - nce king of the social networking hill, now an irrelevant anachronism. Could never happen to Facebook. Never say never.
Whatever people think of Facebook today and no matter how many profess undying fealty to it, an IPO will change things. When Facebook is a public company with shareholders demanding a return on their investments you can be sure Zuckerberg et al will be forced to increase advertising on the site, will indulge in more and more 'targeted' advertising and will use all the necessary, and necessarily intrusive, systems and DPI software needed to boost revenues. This will alienate mpre users and drive them elsewhere.
Facebook's decline may be slow and partial but time is fast catching up with the aging wunderkind. As Cicero had it, "O tempora, O mores." Or " Ah, the age and its principles." Or lack of them.
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