The biggest social networking website off all time, Facebook’s stability is the biggest concern of the market now. There might be a possibility that it will sink to the bottom and rest in peace within this decade. Facebook IPO was in pathetic condition and gradually decreasing share price has punched a big question on Facebook’s future surviving strategies. Apparently, Facebook’s down fall has already started and analysts are concerned about the Facebook users’ engagement capabilities and their future problems.
Facebook Users Are Loosing Charm
Though Facebook is having more than 901 million users highest among all social networking websites but only 40% of its users were accessing their Facebook account regularly. According to a report by Reuters/Ipsos only two active users log-in daily out of 5 Facebook users. The survey shows that 34% Facebook users are spending only half of the time on Facebook compare to which they used to spend six months before and only 20% users have increased their pace in Facebook timeline. The reason behind such down-fall is the constant changing attitude towards Facebook; Users are feeling that the regular habit and activities over Facebook has become boring, Facebook is not productive and security of their sensitive information concerns them too. It is a matter of consideration that most Facebook users belongs from 18 to 34 aged group. 60% users of this age group update their Facebook account daily where only 29% daily users were found among the 55 year age group.
Facebook has declined to comment on the survey, but this will lead to a significant decrease in their advertisement revenue in future as well. GM motors – the third biggest revenue contributor for their Ads in US- recently withdrew their paid advertisement on Facebook just few days before IPO filing.
Bouncing back of Facebook IPO at NASDAQ:
People who invested on Facebook IPO were concerned about the revenue issues and indeed were angry. Facebook share price has fallen down by 29% from its debut price of $38 on this past Monday. The current share price is trading at nearly $27.1( till June 8 market closed) in NASDAQ . Indeed, such variation in share price is already creating a lot of stir for the Facebook CEO Mark Zukerburg. The pit fall in Facebook share price had reduced its market value from $104 billion to roughly $74 billion – a straight negative dive of $30 billion. According to a online poll, conducted by global News agency Reuters, Facebook share holders are in trouble due to the down fall in its share price in just 3 weeks since the IPO launch.
Crash of Facebook:
Nearly half of the Facebook users replied that they had spent about the same amount of time on the social network as six months ago. Keeping users coming back is crucial for all social media services, said Gartner analyst Ray Valdes.
“Facebook continuously has the challenge of Facebook fatigue, of the novelty factor wearing off, and therefore they have to introduce new kinds of interaction,” said Valdes, citing new features such as the “Timeline” interface and the planned $1 billion acquisition of mobile photo-sharing app Instagram.
46% of peoples agreed that after Facebook IPO auction they had demoralized themselves to invest further in general stock markets. Facebook had generated $ 3.7 billion revenue last year, mostly from the ads on its website – comparing with Google Inc $38 billion revenue through Search Ads, which is being considered among the most effective means of online marketing. There are more than 83 million users who are accessing Facebook through their mobile devices. It is a matter of consideration that such a significant percentage of users are using Social networking on mobile. Till now, Facebook has failed to set any revenue model to monetize its mobile traffic. There is no other way, besides desktop users, for Facebook to generate such a large amount of revenue.
Facebook is still perfecting the effectiveness of its ads, said Gartner’s Valdes. But comments posted on the website from Facebook user’s friends were responsible for only 20 percent actually making a purchase. “Comments and recommendations from friends on Facebook do carry a lot of weight, so I’m surprised by the number,” Valdes added.
The other social media websites are also eyeing on pit falls of the social networking giant in various aspects. Pinterest- another rapidly growing social networking site- is creating appreciable traction among business orientated users. 61% American women share their loneliness with Pinterest for shopping, sharing their photos and pining anonymously. While 38% are shopping online, investigating about products and use other social network (including Facebook) for Chatting and Sharing. 27% of women are showing their intellectualism by going through blogs and news and the counting is still increasing. Soon, there might be a news come that Pinterest leaf frog Facebook in generating more ad revenues.
Though the social networking giant still have the grip on their users, but in the field of online advertisement it is still lagging behind and maintaining loose command. It will be great to monitor the wining trade of Facebook despite of all such odds and evens. Hopefully, the great silence from Facebook’s mobile arm will come to and end soon.