Thursday, October 31, 2013

Is Facebook In Trouble?

Yesterday, Facebook announced that its teen demographic is using Facebook less.  The once shiny toy has perhaps lost its luster, partly because older demographics have been embracing Facebook for casual gaming, picture sharing, and commenting on political and social issues.  The author speculates that a number of reasons have led to this decrease including, parents as friends, permanence of their posts, and seeing their "Facebook’s mobile app as bloated".  Still the news that teen usage was declining caused the stock market to sell the stock.  But is Facebook in trouble?

Certainly, the Facebook company saw competition coming to steal this core audience and as a result it acquired Instagram.  I find it likely that those Facebook teens as well as new users are finding Instagram as a preferred alternative.  The author agrees.  "Compare this to slimmer services like Snapchat and Instagram where it’s obvious what you’re supposed to do — view and share photos and videos."  For my own children, early teens, I prefer them having Instagram over Facebook.  Its simplicity allows me to see what is being posted and commented on.  While some argue Snapchat quickly deletes posts, it is not as temporary as some teens and their parents would like. 

Is Facebook in trouble; not really.  Facebook made the right move in buying Instagram; its two products now seem to reach different audiences and offers more revenue opportunities.  Still the shiny new thing may only be temporary as the next new social app emerges.  The one thing we know, teens are a fickle animal, likely to move on to the next shiny object.  But for Facebook, the real revenue opportunity, the 25 - 49 year old, remains strong and should serve Facebook for years to come. 

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