Facebook Has 500M Users, But It Might Not Keep Them

Last Updated Jul 23, 2010 9:00 PM EDT

Mark Zuckerberg on the Facebook official blog said that the company had 500 million active users. An impressive number. However, a little thought could make you wonder just how accurate the claim of "actively using Facebook" might be, and whether some trends indicate that changing tastes and dissatisfaction with the service might not eventually do the same thing to it that they did to MySpace (NWS).

Start with how accurate that number might be. If you've any experience with social media services, you know that strange things happen. People get personal accounts and then maybe a second for a separately professional identity. (Yes, it happens on Facebook, as I've seen it occur.) More to the point, how many people do you know who signed up for Facebook and then hardly ever used it? Look at some stats from Alexa.com. The traffic measurement site pegs the percentage of global Internet users who visit Facebook.com at around 35 percent. But that's an estimate. According to the latest numbers from Internet World Stats, there are over 1.8 billion Internet users in the world, so 35 percent would be something north of 630 million. So Alexa may underestimate traffic -- not surprising, as it estimates numbers from samples.

Next stat: Alexa estimates that users spend an average of 31.5 minutes a day on Facebook. That's a killer number if you compare it to a number of other highly-trafficked sites like the ones in below in the graph from Alexa:

However, the amount has begun to trend down since the beginning of the year. Several factors could play into the trend:
  • Users are getting Facebook burnout.
  • Users have become more efficient or discriminating in their Facebook use.
  • Many people with accounts are only using the site intermittently, which would lower the average use.
My gut tells me that the latter is really what is going on. As with so much on the web -- certainly MySpace went through this -- web sites can be a fad. Most high tech companies don't have a good grasp on how to deal with a fashion-driven market. They assume that the customers who come today will always stay, and that's not necessarily the case. And there are some big questions facing Facebook management. One, brought up by Caroline McCarthy on our sister site CNET, is where Facebook will get its future growth:
In Facebook's original U.S. market, reports have started to indicate that growth may be plateauing, particularly among young adults. But there are some surprisingly big, well-connected countries where Facebook still has a lot of work to do. Take a country like Germany, where Facebook has only 39 percent market penetration. A regional social network called StudiVZ has proven a formidable rival to Facebook, and German authorities' relative hostility toward Facebook's very U.S.-grown privacy policies may make things tougher. Then there's Brazil, where ComScore charts Facebook's market penetration at just over 22 percent; the Google-owned (GOOG) social network Orkut never caught on in the U.S., but Brazilians love it, and still haven't been completely sold on Facebook as a result.
Facebook has big competition from various social networks that got thoroughly established in many other countries. The potential market is there, but it's no cakewalk. Furthermore, the company has begun to lose the 18 to 35 demographic in the U.S., typically seen by advertisers as a key group. More importantly, the abandonment could mean that Facebook has lost its cool factor, which would ultimately be a disaster. Plus, the site has an abysmal user satisfaction rating that is down there with airlines and cable companies. This could become a case for the Yogi Berra quote: "Nobody goes there anymore. It's too crowded."

Image: RGBStock.com user mzacha, site standard license.
  • Erik Sherman On Twitter»

    Erik Sherman is a widely published writer and editor who also does select ghosting and corporate work. The views expressed in this column belong to Sherman and do not represent the views of CBS Interactive. Follow him on Twitter at @ErikSherman or on Facebook.

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