Is Facebook Dying? Yes, But It's Far From Dead

Today I realised something, people are using Facebook less. I think I actually first realized this a few months ago, but today it really hit me. I have almost 400 'friends' on fb and yet it can go for as long as half an hour without any activity showing from any of them, my wife stopped uploaded pictures to Facebook a long time ago, and the list of people showing online for me is never more than twenty or twenty five. A year ago this would have been unimaginable, it seemed as if people couldn't stop giving a running commentary of their day at work, every meal, even informing the world when they took a dump. I seldom see an album of photos these days, yet alone a nice dump status.

Is Facebook Dying?

Obviously my sample of 400 people, mostly from the United Kingdom, on a site with well over half a billion registered members worldwide can't be taken as conclusive evidence of a Myspaceesque demise, so I went on the search for further information. It turns out that I'm not the first people to notice, in fact there is some pretty damning evidence out there to suggest that Facebook has indeed peaked - at least it has in the developed world. According to various analysed advertising statistics, Facebook is said to have lost 5% of US users in May 2011 alone, equivalent to 6 million users and estimated to have resulted in the number of American users falling from 155 million to 149 million. During the same month it also lost a significant number of users from the following countries:

• Canada
• United Kingdom
• Norway

The overall user base was still fast increasing at that stage, gaining tens of millions of new users from developing nations such as Brazil, India, and Mexico. The most valuable advertising markets are shrinking, revenues from developing nations such as India remain a pittance when compared to advertising rates for traffic from the US, UK, and Canada. Despite there being less American users, Quantcast estimate that the number of unique visits from US based surfers has continued to rise, suggesting that the remaining users have actually been using the site more, see the graph below.

The graph shows the growth of Facebook (gray) in relation to the growth of YouTube (blue) and Twitter (red), the two giants have flat-lined over the past year whilst Twitter has continued to grow at an incredibly fast pace.

Why Are People Leaving Facebook?

There are a number of common reasons that US, UK, and Canadian users have given for deactivating or deleting their Facebook accounts, but the most significant ones are ongoing privacy concerns and pure boredom. People got bored of Myspace, people got bored of Friendster, and now people are getting bored of Facebook. It's just a natural cycle but it won't fill the markets with much confident when Facebook complete a stock market launch, the IPO is scheduled for April 2012, employees will be worried that their stock options are not going mature at their peak. The likelihood is of course that the markets will actually go into a frenzy, as they always do with major tech stocks, and the price will become over-inflated rather than in any way deflated by these statistics