A recent report from Princeton researchers stating the growth of Facebook Inc. (NASDAQ:FB) took the world by storm. The widely covered study claims Facebook will lose almost 80% of its users base by 2017. The report portrayed Facebook as a virus, users will soon get rid of. However, Facebook’s data scientists have quoted the report an utter nonsense based upon correlation equals causation methodology of tracking Google Search volumes against it and said such reports will help Princeton lose all its students by 2021.
While the report compared Facebook with a disease that users will eventually recover from, it also justified the claim showing horribly reducing search volume of the word ‘Facebook’ since 2007 on Google. Besides, Princeton researchers went on to quote the example of MySpace that users recovered from after a while, which eventually killed the original MySpace model.
People can have a long-tale debate on Princeton’s study but one thing is for certain, Facebook is not going to lose 960 million users in the next three years – unless it really wants to. In fact, declining search queries on Google about Facebook is a weird thought that becomes the base of any report. Back in 2007 internet users surfed to Facebook by searching through Google, that was the time when Facebook was little known outside the U.S. and was gaining moment only by word-of-mouth marketing.
However, Facebook has definitely been experiencing a slow down in its growth for the last few quarters, something that is natural to any company growing beyond comprehensible proportions. Internet users are slowly downsizing the investment of their internet time on Facebook, which is strengthening the claim that Facebook has already reached the peak of its existence and the only way forward is the record decline.
To analyze such claims, as well as Princeton’s study, we decided to evaluate the left over grounds to claim by Facebook. The analysis helps all of us to visualize Facebook’s future growth (or decline) and possible future road map for the social media giant.
Top 10 countries on Facebook account for nearly 54% of the total user base. However, the two largest countries, especially India, have enough room for Facebook to grow further. In the U.S. nearly 69% of internet users are on Facebook while in India the opportunity window is even bigger as 56% of internet users are yet to join Facebook. A few other countries on the list – UK, Germany and France also have an opportunity where Facebook can expand its reach.
Its absurd to believe that any one online social network could enjoy 100% reach though, getting a sizable share of the whopping 275 million unsigned internet users from top countries shouldn’t be that difficult for Facebook. But the opportunity to grow is not restricted only to the top 10 countries as Facebook has been adopted in another 53 countries. Besides, Facebook is also exploring possibilities to venture into China – world’s largest internet country having more than 300 million users.
The opportunity for Facebook to grow is far bigger beyond these numbers. In countries like India, Brazil, Indonesia, Mexico, Philippines and Turkey where internet users are quite fascinated with Facebook, the internet penetration is just below 50%, in India and Indonesia its less than 20%. In the last three years India added 100 million new internet users while it’s expected to add another 43 million, reaching a total of 243 million by June 2014.
The explosive adoption of low-priced Smartphones coming from the factories of homegrown local vendors has helped Facebook record a steep rise in its user base. In price-sensitive countries like India and Indonesia, number of mobile subscribers is multi-folds compared to internet users. And, with the growing adoption of Smartphones and smart feature phones the opportunity windows is widening. In India alone, there are more than 800 million mobile subscribers, and mobile internet penetration in India has grown from 0.4% in 2012 to 2.4% in 2013.
The growth of mobile and mobile internet has been explosive and Facebook is well-aligned with the trend. The social giant has revamped and enhanced its mobile presence 7 times in the last 2 years compared to 3 major changes introduced for non-mobile device users. In fiscal Q2, 2013, which ended on September 30, 30% of Facebook users were accessing the network from mobile devices. As Facebook’s third quarter result is just around the corner, mobile users’ share is expected to rise drastically.
Therefore, in light of the above statistics and trends, any biased claims, the likes of Princeton studies fall flat. However, there is no doubt that Facebook have challenges on the horizon. The social network is not as social and cool as it used to be in its heydays. The network is overcrowded with marketers and illegitimate claims, mobile social apps like WhatsApp and WeChat have already started challenging the regime of Facebook.
Users are preferring to stay engaged in self-made private social networks connected via their mobile numbers. The emergence of local chat apps, networks is another big challenge for Facebook. Collectively, these aspects could make Facebook shrink a bit or a bit more, but accepting bizarre claims which suggest that 960 million users will dump the social media titan in just three years is as farcical as believing that John Carter travelling to Mars using a medallion is real.