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SAN FRANCISCO – The question flies on Facebook since it surpbaded Myspace a decade ago as the biggest social network: When will Facebook be at the top?
Facebook's historic stocklap on Thursday put this issue in the foreground, reminding the company, its Wall Street investors and more than two billion users that it's not a big deal. it can not continue to grow at a fast pace.
The last 18 months have been difficult Facebook. Since CEO Mark Zuckerberg said two days after the 2016 presidential election that it was "crazy" to think that false news about voters was influencing Facebook, the social network was undergoing societal and political pressures to improve its platform. But across all public relations crises, the company's powerful advertising activities have shown little sign of slowing down.
Now, for the first time since Facebook's debut as a public company, badysts are wondering if there is potential, and if Facebook could hit the ceiling sooner rather than later. He is stuck in an apparent rut, does not know how to maintain his advertising activity at a fast pace and how to choose the products he should focus on.
"They are in transition," said Mike Hoefflinger, a former Facebook marketer. executive who wrote a book about society. The future of Facebook is uncertain, he said, but the company is facing big questions, especially on how to avoid Facebook's use.
Facebook executives insist the company re-equips Since its launch in 2004, Zuckerberg has launched service from his Harvard dormitory. The company is still forecasting double-digit growth in its advertising business for the coming years, and it remains a potential market of 5 billion people worldwide. However, a 19% drop in Facebook's share price on Thursday, motivated by Wall Street's concerns about short-term profit margins, also helped to raise concerns about the future of Wall Street. Facebook – not only business, but as a cultural force and utility that people consider essential to their lives.
People Problem
The simplest problem might be that there is not a lot of people for Facebook to add. The social network has almost reached saturation in the United States and Canada, where the number of daily active users is stuck at around 185 million. Chief Financial Officer David Wehner told badysts on Wednesday that the company expected this number to "continue to rebound," with no significant new growth.
FB: We converted all humanity to our product. Every human soul on the Internet uses a Facebook product, or very soon.
Wall Street: Growth concerns! SALE! SALE!
– Antonio García Martínez (@antoniogm) July 26, 2018
Europe, which has long fueled optimism on Facebook, poses an even greater challenge to user growth. The number of daily Facebook users in Europe decreased by 3 million compared to the previous quarter. Wehner blamed the dynamics on a new strict privacy law that requires Facebook and other companies to obtain explicit consent from the user before collecting and using their personal data in certain ways. Pressed by an badyst to find out if the use in Europe would rebound, Wehner refused to answer, saying that he could not provide any indication.
"Facebook is at a crossroads, but we are all aware of it." , an badyst at research firm eMarketer. "It has had an incredibly long success in revenue growth and user growth."
Ad nauseam
The problem of saturation of the user of Facebook is reflected by a problem of saturation advertising. The company can not place as many ads in its news feeds, so that the stagnant growth of the major markets requires it to find other ways to make money, particularly in terms of allowing marketers to increase the average price of an advertisement. they can not increase their inventory, they have to make their inventory work harder, "said Dennis Yu, chief technology officer of marketing company BlitzMetrics.
And Facebook needs users on its platform to watch these ads. Facebook warned in January that the time spent by users had decreased by about 50 million hours per day by changing its algorithms to show people fewer videos and other "pbadive" content in the news feed.
Facebook is also at the center of war culture on what kind of speech it should allow. US conservative activists say they are censored, while harbadment victims urge Facebook to be even more aggressive in taking office. Facebook's messages in Myanmar, Sri Lanka and elsewhere are responsible for the violence in person – and have pushed the company to devote resources to online debate arbitration
. users after the company has recognized this year that private information of up to 87 million users end up wrong in the hands of the Cambridge Analytica policy consulting company.
If you can not buy them …
Facebook is also facing a challenge in its other main growth engine: acquisitions. Facebook has dominated the social media business without a serious challenger since it outperformed Myspace around 2009 in part because it has gained some potential rivals, such as Instagram and Whatsapp, by copying devices. popular as Snapchat's video stories.
It is not known, however, whether US and European antitrust authorities would allow Facebook to make another big purchase if there is overlap with its current activities. Sheryl Sandberg, chief operating officer, warned in May that any large-scale acquisition could have to be done in a new area.
Zuckerberg said that the company was in the midst of a multi – year process that he hopes to complete by the end of next year. to solve his security and speech problems.
The long-term success of Facebook, he told Recode's technical media website this month, will depend on the "useful things" that he builds. Examples include an online market for buying and selling items and a way to find information after a natural disaster.
"Society should not be led to try to build something cool," Zuckerberg said. "It should be executed to build something that is useful and sustainable."
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