Tuesday, 4 February 2014

Facebook copes with growing pains

Facebook is 10, and is now adapting to an ageing user base.

FACEBOOK, the world’s biggest social network, is finding its path as a maturing company, adapting to an ageing user base.

The company created in a Harvard dorm room in 2004 has established itself as a phenomenon, securing its place in the world of the technology giants.

“Facebook has made the world much smaller, much more interactive,” said Global Equities Research analyst Trip Chowdhry.

“Facebook started the social revolution but it may not be able to control it.”

In its short history, Facebook has become a part of daily life for more than a billion people around the globe.

Co-founder Mark Zuckerberg described the mission as “making the world more open and connected,” and some say he has accomplished just that.

“More than 20% of all time spent on the Internet is spent on Facebook,” says Lou Kerner, founder of the Social Internet Fund.

Yet in some ways, Facebook could be the victim of its own success.

Its initial core base of teens and university students has expanded, and Facebook is now widely used by people in all age groups.

Facebook says it has a global total of 1.23 billion monthly active users, including 945 million who use the social network on a mobile device.

But some analysts note that Facebook has to shift strategy for an ageing user base.

An iStrategyLabs study of US Facebook users found a 25% drop in the number of users in the 13 to 17 age group, along with an 80% jump in the number of users over 55.

“People joke that for the teen, Facebook isn’t cool when your mum is on it,” Kerner said. “I think it’s not even your mum any more, now it’s also your grandmother.”

The research firm Social Bakers says its data shows teens are a big and still-growing part of Facebook.

“The 18 to 24-year-old age group is still the largest,” said the group’s Ben Harper.

“Our data shows the growth of audience and interactions on Facebook, and while teens are undoubtedly using multiple platforms (as we all are), they are also sticking with Facebook.”

In the United States, Facebook is used by 71% of all adults who are on the Internet, or 57% of the adult population, according to the Pew Research Center.

Pew found that while Facebook is used by 89% of online adults in the 18 to 29 age group, it is also used by 60% in the 50 to 64 age category and 45% of those over 65.

Facebook is maturing as a company as well. It had a calamitous initial public offering in May 2012 plagued by technical glitches, and saw its share price slump by half, but has been on a roll for the past year, with its stock hitting record highs.

“Facebook appears (to be) the best way to play the social Internet,” Morgan Stanley analysts said in a note to clients, preferring Facebook to the up-and-coming network Twitter.

Kerner note that being “cool” is not necessarily Facebook’s long-term goal.

“You can’t be the cool place forever,” he said.

“One of two things happen to companies when they’re done being cool. They either go away, or they transition to becoming more of a utility. And Facebook is very successfully doing the latter.” – AFP

Tags / Keywords: Youth , facebook , twitter , social media


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