Investors worry that the market has reached Peak Facebook?
THIS might not be good news for people who (follishly) invested in Facebook stock at the IPO. There’s a distinct possibility that we’ve already reached peak Facebook and that it’s just not going to get any better from here.
There’s four things that determine how much money Facebook can make. How many users it has, how much time they spend using it, how many ads Facebook can show them in that time and the price FB can charge for those ads. To boost profits Facebook would rather like all four to be rising. However, in the mature territories, that’s not what seems to be happening.
Many more people are accessing it from mobiles and mobile screens have less space for ads than do computer ones. Also, the price on mobile ads is lower than on regular ones. And then there’s the next problem:
Facebook’s popularity is slumping in the UK as users become fed up with being bombarded with advertising, a YouGov survey has revealed.
In a report examining social media use among web-savvy Brits, the market research firm found a 9 per cent drop in Facebook usage since April 2012.
They’ve also got fewer people spending less time on the site.
It has to be said that it’s not looking good.
The basic FBook story was that it was much more than just a site like Bebo, Friends Get Divorced and all that. Facebook had so many users that it had become an essential part of having a social life at all. a basic part of the social infrastucture that everyone would join and everyone would use. And it’s that part of the story that seems not to be true.
Which really doesn’t bode well for the long term future of the company or share price.
Posted: 30th, May 2013 | In: Money, Technology Comment | TrackBack | Permalink
