In its fourth quarter earnings call the figures showed Facebook’s growth is slowing, but their spending is comparatively big.
Mark Zuckerberg has laid out a plan to grow and make their businesses of photo-sharing, video, and messaging via WhatsApp and Facebook Messenger as well as Instagram profitable within five years.
He also projects that in ten years -thanks to the company’s bold initiative- the remainder of the world’s population will have access to the internet.
What many have been noting for the last year or so, however, is that Facebook as a social network is irrelevant to a certain emerging section of the population. Kids.
Here in this video from Business Insider are a bunch of adorable little tweens and teens saying things like, “I think my mum and my grandma are on Facebook?”…
So, why does this matter?
Well, it means there will come a time where Facebook stops growing and will have to do something to completely redefine who they are. And let me clarify, I’m talking about Facebook as a social network, separate from the still growing Instagram, WhatsApp and Facebook Messenger base.
Facebook as a social network is where they are making money through ads and search. They’re growing their video platform through the newsfeed, and if they can’t get a new generation of people onto that network, then they may well suffer a major decline.
Not today or tomorrow of course, but, let’s say, ten years from now.
Seriously, Facebook reminds me a lot of Microsoft a decade ago. It’s a grinding necessity for many, and that’s not great. There are a lot of people who don’t enjoy using it, but they stay to maintain contact with certain people.
For most people, everybody they know is on Facebook. And for kids, the fact that parents and grandparents are on a social network which is an escape for many, brings it more and more in line with daily life, and makes it less special.
So, why doesn’t Facebook just shift focus away from its network and grow something else with a different name?
Because Facebook -the social network- sells ads, a trait its recent acquisitions don’t share.
They could foreseeably find a way to spin off their video service, and the talk is they will soon have an effective ad strategy for that side of the business, but so far that remains to be seen.
Plus Instagram still doesn’t have ads on it, and once it does the Facebook haters who don’t want to see their ad-less little photo sharing network contaminated will boycott or at least kick up a fuss. Plus I don’t understand how they could even try introducing any sort of advertising to Messenger and WhatsApp, but they could prove me wrong. Who knows.
The point is that Facebook, were it to stay much the same as it is now ten years into the future, would be screwed.
While CEO Mark Zuckerberg insists he has a plan, the reality is that all he needs to do before next quarter is show some growth to appease investors.
So go ahead Zuck, I’m interested to see what you come up with!