When a 2013 academic paper suggested Facebook could swiftly go the way of MySpace, the social media giant was able to laugh off the claims, showing that its client base was growing while the university in question was sliding.
Marking 10 years on Feb. 4, Mark Zuckerberg’s baby has reasons to celebrate. More than one billion of us now hold accounts, with a steady increase in monthly users in every region of the world. The company’s stock value has soared past $150 billion after a disastrous initial flotation.
Yet there are growing threats to the global leader. Facebook’s recent output — a flurry of apps like Paper, which makes reading easier and integrates Instagram, and Messenger, a no-frills riff on Snapchat — show the company’s awareness that its crown is slipping in a white-hot competitive market.
Teenage users are down 25 percent in the last three years, and the company’s own research highlighted a “decrease in daily users, specifically among teens” as a leading concern. The classic formula is no longer enough, and the company is responding with creative gambles.
“The rate of change has to keep pace with both technical innovation and the changes in consumer taste,” Matthew Rhodes, director at FreshMinds digital strategy consultancy, told Metro. “Facebook is under massive pressure to keep changing, and I expect to see a vast new ecosystem of standalone apps for different purposes.”
Zuckerberg himself suggested it would take the next “three to five years” to transition from a web to mobile company, during which rivals like Twitter and Instagram could continue their rapid expansion alongside new competitors.
But Facebook’s sheer size will prove an advantage, says Nate Elliott, senior analyst at Forrester Research.
“Every day they are giving people more reasons to come back, whether through their own innovations or stealing others,'” he said.
He added that competition is not a “zero-sum game” and that social media companies can grow simultaneously given the rate of user demand.
The company’s major challenge will remain how best to monetize a free service, which could threaten its share price.
“Given that it’s the largest media property ever, marketers are not satisfied with Facebook performance, which is less effective than email marketing,” said Elliott. “The company seems to consider it a second priority, but if I were them I would be working very hard to serve marketers.”