The changing face of Facebook

Jul. 01, 2014 | by Sam Vining

Latest research from Forrester shows that Facebook still dominates teens’ social media usage, but this doesn’t mean it can sit back and relax.  The challenge now for Facebook is to remain relevant to younger audiences as smaller competitors continue to innovate at a blistering pace. So far they have achieved this by tactically acquiring other technology firms – nearly 50 to date – once they’ve demonstrated the ability to attract and retain an audience.

Although this has been successful to date, given the eye-watering costs ($1bn for Instagram, $19bn for WhatsApp, $2bn for Oculus VR), it remains to be seen whether this strategy is sustainable.

Whether or not Facebook is currently the social network of choice for most young adults is a moot point (although the data is fairly clear that it is). Facebook is constantly under threat that an upstart will emerge that won’t sell, and whose product is strong enough to lure away Facebook’s core demographics.

So far new competitors seem to be operating in tandem with Facebook rather than competing for the same attention. Snapchat and Twitter have grown meteorically in the last few years , although Facebook has weathered this as the average time adults spend using digital media has continued to increase (up to nearly 50% of time spent with major media in the U.S.), allowing room for more than one social network in most users’ lives.

However, it seems Facebook is safe in the near term. Many thought that Google+ would send Facebook tumbling from top position when it was launched in 2011. However, in April 2014 Vic Gundotra stepped down as VP of Social, prompting many to speculate that the social network might be doomed to retirement despite boasting 1.15bn registered users just 2.5 years after launch.

As shown in the infographic- there’s still a huge opportunity for Facebook to grow as the infrastructure of developing nations catches up with the already mature western market.

FBat10

Indeed, while the US holds on to the top spot in terms of the overall number of users, with 18 million, India and Brazil take second and third place with 9.4 million and 8.8 million users respectively.  What’s more the growth in these developing markets is almost off the scale – Brazil saw the fastest growth in users with no less than a 556% increase last year alone.  This equates to a massive 203,000 new users every day of the year.  India saw a 326% rise in users over the same period, putting it in second place in terms of growth while Mexico was in third with 135% growth.

But this opportunity goes hand-in-hand with one of Facebook’s greatest challenges – as these markets mature, new competitors will emerge from burgeoning technology sectors; Poolwo for example, launched in India (a country with less than 10% Facebook penetration) at the beginning of this year. It’s clear that it’s not going to be all plain sailing for Facebook as they continue to grow.

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