Does Facebook lose its sex appeal?

Even though it mereley exists for a couple of years, Facebook has without the slightest doubt already made history. Heck, which Tech startup has ever reached such a high valution before appropriate earnings have been made, have marketing departments in big international enterprises agree to completely go without their own company website and rely entirely on FB fan pages to present their products and services to their customers – and has a movie made about its billionaire founder who hasn’t even made it to the age of 30 yet?

This amazing history always came with a prize and enough headwind, think about data security issues and the latest face recognition stunt. Zuckerberg’s strategy in this respect has always been “do it now, apologise later” and it has always worked. Surely, there are instances where the battles seem to become a little tougher, such as the recent move of the state of Schleswig-Holstein (ie. Thilo Weichert, head of the office for data protection) to ban the Facebook like button and fine those sites using it. See Jeff Jarvis’ Disliking “Like” in Germany for the comments of someone, who as an American keeps on marveling about Germany’s very unique stance when it comes to privacy and data security issues. In this case I’m sure this will be resolved with an outcome similar to the pixelation solution used by Google because in Germany there were so many adversaries to the Google Street View project.

Despite all this, I cannot help seeing signs that even the ever-successful FB is struggling in some respects. Given that rumours see the alleged $100bn IPO in 2012, this is bad timing. That might be the ever-pessimistic, rant-prone self that likes to get out sometimes, but let me explain first.

Slower growth

Using FB’s advertising tool, one can make intelligent guesses about how the overall number of FB users develops over time. According to their own research, a report in the Daily Mail claims that FB is losing users in the UK and in Canada and don’t fail to establish a new buzz term. Welcome “Facebook fatigue”. Of course, those types of analyses always have to be taken with pinch of salt. Who can be sure that the numbers made public in the advertising tool are the real data? Yet, if FB fatigue proves to be a self-fulfilling prophecy, it can indeed be a danger to FB claimed goal to reach 1 bn users. It seems more and more likely that FB has to rely on emerging countries such as Asian countries and Southern America rather its core markets in the US and Europe to be able to meet this number.

Google Plus

Google has, in many respects, build a nice FB clone – this becomes very obvious when taking a look at the eye-tracking patterns of users. Surely, why not adapt a concept that works and add one’s own spices in the process? However, there’s more to come, and in the past Google has built a pretty arsenal of web applications that FB is simply missing. Take Google Mail, Google Calendar or Picasa – these are professional services that have been used for years and that find no counterpart in the FB universe. Add to that the fact that Google Plus will also allow games – and by that a massive revenue driver as the example of Zynga and the likes show – and it emerges that Google’s chances to take users away from FB are not too bad.

FCommerce

FB could have made online marketers’ wildest dream come true: Provide access to potential customers who are willing to share their data voluntarily! Users on FB express their likes every day and its not unusual to be very specific about the things and services one might be interested in. As a result, targeting those users by means of advertising campaigns can be very exact, pinpointing the audience as much as possible.
Alas, users don’t seem to behave as they should. According to a recent study done by IBM most users don’t care about brand interaction and rather communicate with friends and families – imagine! Users on FB are typically in recreational mode, sharing and reading private stuff, funny videos and cat content. If they want to inform about a product or a company they are likely to use other sources. Thus, FB is not really a place to do your online shopping, and although it can make sense to offer the odd product via FB once in a while, this social network will never become a mainstream commerce platform as some pundits have everyone believe. If a company/producer/retailer painstakingly builds an audience on the basis of its uniqueness and then forfeits this uniqueness by using standard FB mechanisms to sell their products – something must be wrong. And considering that the biggest asset FB owns and continues to build are customer data, and those customers spend their time on FB uploading photos and chatting away rather than buying things, I’m inclined to ask whether those data are as valuable after all.

This is not a Death-of-Facebook-post (I leave those types of claims of to Wired magazine), of course. FB is still growing overall, however, with regard to its core markets the development is less dynamic. Although FB’s massive user-base and its wide acceptance cannot be discussed away, the example of MySpace shows how a formerly successful platform can fade into meaninglessness in only a few years. (Image by smemon)

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