Is Facebook a Passing Fad? Nearly Half of Americans Think So

[CiaranM]

My point is that it will take a massive social and/or economic movement to take down Facebook. It's not like when Friendster just started to suck so people left it. It doesn't matter if Facebook has or is sucking at the moment. It's so engrained in our lives and businesses in a way that Friendster or AOL never was. AOL basically said, "Hey, the Internet is cool...we'll connect you to it and we'll show you some cool things on it." Facebook is different in that it says, "This is social media, you show everyone what *you* can do with it...and attach your real name to it as well."

That's not just about what people post about their everyday lives. Facebook is allowing for developers as well as your average user to make their own pages and games if they want. It's a lot like the culture of YouTube, but with so much more to offer...PLUS much more room to grow.

plus ppl have invested a lot in FB .... they have built up friends lists, joined groups, made photo albums, played stupid ******* games like farm-*******-ville .... FB can and possibly will fail/fade in the future .... but i don't think it's gonna happen any time soon !!!

[FarangFarang]

plus ppl have invested a lot in FB .... they have built up friends lists, joined groups, made photo albums, played stupid fucking games like farm-fucking-ville .... FB can and possibly will fail/fade in the future .... but i don't think it's gonna happen any time soon !!!

I'm not predicting that it fails anytime soon either. Just that it can, at some point.

And like I said, a big instigator of that will be when Facebook has to open up. Now that they've gone public and all eyes are on them, expect governments around the world to take a keener interest in what FB is collecting about you and whether or not you can move your data to other platforms.

I'm working on a few projects that involve games on Facebook and, as a gaming platform, most developers would love to avoid FB like the plague. But you have to develop for FB because of the traffic they can send your game.

For instance, if your game is on the FB platform the only form of payment you can accept is FB tokens. FB takes a 30% fee on the tokens. Thirty-fucking-percent!!! They justify it by saying that they'll send you so much traffic that it'll make up for the higher fees.

But what happens when it doesn't? That was the problem with Zynga's IPO. They had to put in the offering prospectus that without Facebook they would be out of business. A lot of investors were spooked by that because it means FB could change their terms tomorrow and Zynga would have few alternatives. They're stuck and they're at the mercy of FB. That's not a great spot to be in and it wouldn't take a whole lot of coaxing to get many game developers to abandon FB if there was a viable alternative.

[FarangFarang]

Look at any of the sites now (or even in the screenshots that you've posted), and you'll see something interesting.

They have a facebook connect button.

I agree that Facebook will fail at some point. Then again, the Roman Empire failed as well. The USA's empire will crumble at some point too.

My point is that it will take a massive social and/or economic movement to take down Facebook. It's not like when Friendster just started to suck so people left it. It doesn't matter if Facebook has or is sucking at the moment. It's so engrained in our lives and businesses in a way that Friendster or AOL never was. AOL basically said, "Hey, the Internet is cool...we'll connect you to it and we'll show you some cool things on it." Facebook is different in that it says, "This is social media, you show everyone what *you* can do with it...and attach your real name to it as well."

That's not just about what people post about their everyday lives. Facebook is allowing for developers as well as your average user to make their own pages and games if they want. It's a lot like the culture of YouTube, but with so much more to offer...PLUS much more room to grow.

Well, it's not really a great data point since the whole universal login thing has been going around since before 2000. OpenID, Yahoo credentials, etc, etc.

One of the biggest hurdles was achieving critical mass. When I worked at eToys we were approached by every e-wallet, universal login scheme, etc. But, at the end of the day, the decision always came down to, "Why should we be the guinea pigs on this?"

Facebook achieved critical mass quickly enough to negate that argument. And as each site (not just the social media sites) began slapping a Facebook Connect button on their website it became easier and easier for the next site to justify allowing FB to handle their user authentication.

But, you can still use Facebook Connect without being active on FB. FB doesn't have to cease to exist. It just has to lose market share to competitors.

I guess I look at FB the same way I've seen every other internet fad over the last 20+ years. I've seen so many websites, technologies, etc that were going to be the future of the internet that are anything but today. Whether it be Java, Push technology, Lycos, Excite, Yahoo, etc, etc, etc. They all had large followings in terms of percentage of users who used them.

For instance, I would be willing to guess/bet that someone like Yahoo, at one time, had a larger percentage of total internet users than Facebook does today. The difference is, the internet is much larger today.

Officially, Facebook has 500 million users. I think the more accurate estimate is about 750 million. There are 2.3 billion people with internet access in the world (out of 7 billion people in the world - roughly 33%). So FB has about 32% of the total internet using population.

I gotta believe that more than 32% of internet users in 1995 had used Yahoo at one point or another. In 1995 there were only 40 million internet users, total.

Of course it seems like FB is integrated into our lives. Yahoo seemed integrated in my life back in 1995 too.

I think that FB's demise will eventually come from a thousand paper cuts rather than via someone outright knocking them on their ass. Take any FB feature and eventually someone will come up with a better way to do it. For instance, if you like reading status updates, maybe Twitter becomes the norm for you (it already is for me). Or if you like picture sharing, maybe someone comes along with something way cooler. And maybe the game developers get tired of the 30% FB tax and develop a social network just for cool games.

FB could have hundreds or thousands of smaller sites taking nips here and there. It's hard to be the best at everything you do and FB is going to run into that problem sooner or later (they already have, in some cases).

And FB's value to users is in the network effect. The more people who use it, the more valuable it becomes. The same happens when you go in the other direction. If thousands of companies are stealing away little bits of FB's traffic by offering something better, FB becomes less valuable. Today, maybe 80% of your friends are on FB daily. What happens if that number drops to 50%? Do you check in as much? Do you post as many status updates? And if you're posting less, other people will tend to post less (or on other sites), etc, etc.

[FarangFarang]

BTW: If you do use FB, be aware that they plan on using your picture in their ads. So if I view a page on FB, I might see an ad with Ciaran's picture for ladies swimwear :-)

On Friday, FACEBOOK will start using your photos in ads that appear on the profile of your contacts. It is legal and what is listed when you open an account. To prevent this do the following: Go to "Account Settings", click on "Facebook Ads" down everything on your left, then click "Advertisement for 3rd Parties" and choose No One.

[olympos]

I might see an ad with Ciaran's picture for ladies swimwear :-)

Or even a puusy face :-)

[Admin_2]

Or even a puusy face :-)

I have seen him with a bikini bottom covering most of his mug.

[FarangFarang]

I have seen him with a bikini bottom covering most of his mug.

Yes, but it was your bikini bottom

[FarangFarang]

Interesting article on getting rid of Facebook. It's not really getting rid of FB, per se, but it is a guide on how to devalue the effect it has on your life by backing up a bunch of info, not relying on it to handle day to day stuff, and to break the hold FB has on your personal data.

Dump Facebook, Keep Your Friends: A Step-By-Step Guide

BTW, this is sort of what I was talking about in my previous comments in terms of moving on from FB. It's not a binary, 0 or 1, yes or no, type of proposition. You can keep your FB account but not be a slave to it.

It serves certain roles very well. But it's branched out in so many different directions (games, apps, etc) that are only there because of FB's ability to throw large amounts of traffic at them. If other services come along and start doing those same things without FB's rules and boundaries, it's very easy to see them lose traffic to people doing it better.

Or, to put it another way, FB will move into the background. Sort of like LinkedIn. I use LinkedIn but I don't spend hours and hours on it. But it's great for meeting business contacts or catching up on what former co-workers are up to now. But I don't need to check it 20 times a day. I get an email once a week telling me who's changed jobs, who's added info to their profile, etc. That's all I need from them and that's what they deliver.

Edited June 4, 2012 by FarangFarang

[FarangFarang]

Sean Parker, an early investor in Facebook Inc. (FB), said he’s bored by the social network. That’s partly why he introduced a new service today that allows users to chat by video and share files with friends and strangers.

During a star-studded event in New York that included rapper Snoop Dog, actor Jim Carrey and singer Alicia Keys, Parker showed off Airtime, a video site connected to the Facebook platform that includes a “next” button to find a random chat partner, similar to the once-hot online video service Chatroulette.

Parker, who co-founded Napster Inc. and now Airtime Media Inc. with Shawn Fanning, said randomized video is outside Facebook’s area of interest and the social network already has its hands full building its service. Parker and Fanning, who said they met on the Internet, wanted to make it easy for friendships to begin by connecting people who have shared Facebook interests.

“Facebook isn’t helping you make new connections, Facebook doesn’t develop new relationships, Facebook is just trying to be the most accurate model of your social graph,” Parker said at the event. “There’s a part of me that feels somewhat bored by all of this. There’s no room for serendipity.”

The presentation didn’t go off smoothly. At one point, Carrey wasn’t aware that the video cut off and continued a performance backstage, before he was called to come on.

“This is not how it’s really operating, I swear to God,” said comedian Olivia Munn after several delays, before saying she doesn’t believe in God.

Parker said after the event that the actors helped ensure that even if things didn’t go according to plan, people would still have fun.

“In the event that things went horribly wrong, which they did, everyone was a comedian, everyone was improvising,” he said in an interview.

http://www.bloomberg.com/news/2012-06-05/facebook-backer-parker-calls-site-boring-adds-video-chat.html

Pretty much the point I've made about FB for several years now. Great for keeping in contact with people you already know. Not so great at meeting anybody new.

[Admin_2]

[h=1]Survey: 1 in 3 Facebook users getting bored with the social network[/h]

Are you just not as drawn to the social network comings and goings of your friends and family as you once were? If so, you're not alone: According to a new poll by Reuters and research firm Ipsos, roughly one-third of Facebook users are feeling pretty "meh" about the social network these days, and the sentiment seems to be growing.

The survey focused more on the potential monetization of Facebook than current user habits, but the data was telling in several ways. According to the poll of over 1,000 Americans, 80% of Facebook users have never purchased a product or service because of what they saw on the site, meaning that whatever advertising techniques companies are currently employing to grab your cash simply isn't working.

Unsurprisingly, the survey found that users between the ages of 18 and 34 were the most active, while just 29% of people over 55 considered themselves regular users. Unfortunately, people who spend a great deal of time on the network are often victims of what the researchers call "Facebook fatigue," leading them to spend less and less time checking in with friends and browsing the profiles of their peers. What do you think? Have your Facebook habits changed? Let us know in the comments.

[FarangFarang]

I know that for stuff like Zynga games, only 5% of all Zynga's massive player database has ever spent a single penny playing their games. And out of the 5% it's sort of the 80/20 rule with 20% of Zynga's 5% of paying players generating 80% of Zynga's revenue.

[FarangFarang]

More stuff on Facebook popularity:

Facebook slap

[FarangFarang]

Interesting article:

You Are The Product of Facebook

I still do… but it’s important to recognize that the value of Facebook doesn’t come from the software, it comes from having so many users. You are Facebook’s product, not the application. Facebook has developed your behavior, captured your data, and are now optimizing it to sell advertising. It’s not about the software, it’s about you. It’s not about selling services or products, it’s about selling you.

There’s a problem inherent in that business plan, though, and that’s that people aren’t something that you can control. People are fickle. People are independent in someways and followers in other ways. As quickly as Facebook grew to 800 million users, they could easily leave Facebook for the next platform.

Read more: http://www.marketingtechblog.com/facebook-product/#ixzz20cqyvZjL

[FarangFarang]

Facebook's core business problem

Summary: The social media service has done a great job including just about everyone with an Internet connection. That's exactly the problem.

Like any social media platform, Facebook needs eyeballs to survive. It doesn't matter how many photos or games or pages or even deals it has to offer; if people are not interested in using the service, it's all for naught.

Over the years, the service has been aggressive in making changes to ensure its survival, and over the long-run, they've largely been savvy decisions: the news feed, formal pages and Timeline have all helped the service structure data in such a way to facilitate targeted advertising and the like, even if I'll never be completely content with the restriction that I can't simply put "early '90s alternative rock" as a music preference and just leave it at that.

Over time, Facebook grew from a restrictive Ivy League social network to one where only the non-digital were left out. Like so many other social networks, from Twitter to Path to Pinterest, Facebook started as a trendy club. The difference is that it evolved carefully enough to turn the place into a global town square.

That's a wonderful thing, both for Internet denizens and Facebook's business model. More scale in user adoption and more leverage in business deals, all while users get to reconnect with old friends and distant family. Win-win.

Early in its evolution, Facebook shifted users' attention from profiles to status updates, after it introduced the News Feed. For a long time, that wasn't a big deal -- sure, there was a lot more information to digest, and some people cried foul about it. But it was all being created by friends you cared about.

As Facebook continued to scale, so did our friends circles, and now it's likely that you're Facebook friends with family members, coworkers, college friends and post-college friends, with handfuls of single-serving contacts along the way. Your personal network now encompasses a number of real-life social circles, past and present, with just a single thing in common: you.

Facebook has met this overwhelming amount of information by employing an algorithm to emphasize and de-emphasize certain friends' updates. It has been a rocky path: first, Facebook gave users the ability to create custom lists around those real-life friends circles (e.g. work, family, friends). Then it realized only a minority of users were using the tools, so it started taking matters into its own hands.

Wonder why you never see updates from your 348th high school classmate anymore? That's why.

It's a good idea in theory; if you have more than 1,000 "friends," the noise becomes impossible to overcome. No one should have 1,000 friends, but who's counting? I no longer hear from my 348th high school classmate anymore on Facebook's News Feed, and he/she me. While the occasional voyeuristic update is missed in the name of digital social diversity, it's no great loss.

But there's much work left to be done.

In recent months, my feed has become overwhelmed by shareable items. I suspect yours has, too. For example, one member of my immediate family is addicted to sharing inspirational photos; one member of my extended family -- a military veteran -- has a penchant for sharing pro-military items; another friend is hell-bent on inviting everyone with a pulse to join Zynga's newest game, every week. Logging on to Facebook has become the digital equivalent of visiting the DMV: it's hot, it's crowded, everyone's waiting around in boredom and a bunch of crazy people are shouting in the corner.

Get me outta here.

This is a business problem for Facebook. If it can't hang on to its users -- people like me, who want to use the service and would consider using a competing one -- it's a slippery, albeit miles-long, slope to irrelevance.

So what's really happening here? Facebook has figured out how to filter content roughly, based on the person, but it has yet to do so in a more elegant, granular way, based on the kind of person. It short, it hasn't quite figured out how to bridge the socioeconomic divides that exist between our real-life friends circles. I love my family, and I'm stuck with them for life -- but that doesn't mean I need to hear them out more than twice a year. We, simply, are not in the same circle of friends, in the original sense of the term. But on Facebook, it's Thanksgiving dinner, every day of the week.

This didn't used to be such a problem, back when users had to check others' profiles for updates. Want to check the profile of your hyperpolitical friend who has views directly in opposition to your own and spouts them regularly? Great. In today's format, that information floods in. It's all or nothing.

You could say that Facebook has created user lists for this very reason, so that you can take matters into your own hands. This is true. But the default is everything. Only a minority of users are going to bother with such lists. Meanwhile, everyone will continue friending, forever more. The solution is not more user action. It's the algorithm.

Despite my various ties to people through blood, education, workplace and other various life categories, there's a more nuanced connection I have with certain people whose input I value more highly than others. That could be a shared political view (or none at all, a.k.a. a preference that Facebook remain an apolitical forum), that could be a topical interest (in my case, publishing), or it could be basic lifestyle choices: while it's lovely to learn how my old classmate is living in Cleveland with her husband and three kids and crafts business, it's not really relevant to my life as a childless urbanite with a serious love for the printed word. What I find funny or interesting or shareable may not be the same as her. The social gap becomes apparent to each user over time. To date, Facebook's algorithm can't really discern the difference, at least as far as I can tell in my experience using my feed.

This, of course, also applies to brands and other businesses using Facebook as a social outreach or advertising platform. On ZDNet's Facebook page, many of the 115,000 people who "like" it don't regularly see updates from us in their feeds, for no apparent reason. We've actually received complaints from readers about this, but the bottom line is that Facebook is controlling the bottleneck -- and in these examples, it's doing so in a way that's clearly counter to user expectation or desire. (I should add, there is no way to tell Facebook, "Yes, I'd like regular updates from this page" or "No, I'd like only occasional updates from this page." Either way, that's no solution for the default.)

To be fair to the company, algorithms must constantly be tweaked, and there's a lot left to learn here. This is, in many ways, a big data problem: the company has given us more and more ways to demonstrate our interests, but not enough ways to indicate and sort their importance relative to each other. If the company can't get it right in a reasonable window of time -- how much that is, I don't really know -- it's going to start losing users who are tired of scrolling through shared items that have little relevance to them. Anecdotally, I find myself graviating more toward Twitter and Instagram, if only because there's less abuse I'm forced to endure.

There will always be users of Internet services who fail to filter their broadcasting appropriately; this has been true since the early days of chain e-mail ("Fwd: Fwd: Fwd: Fwd: Fwd: Fwd: Fwd: HILARIOUS!!!! Please fwd to 10 ppl"). Facebook doesn't change this dynamic, though it centralizes its effects. It was Facebook's decision years ago to take on the responsibility of filtering this information for us; if the company can't get a handle on more finely tuning the flow, it's going to lose users fed up with trying (and failing) to maintain their experience; a never-ending game of Whac-a-Mole with exponentially more holes each round.

The town square will remain, sure. But it will not be the same.

http://www.zdnet.com/facebooks-core-business-problem-7000001113/

[Stramash]

Still think the thread title could be misleading. I mean, something like 53% of Americans believe in angels, so this is hardly a matter of concern for Zuckerberg is it?

[Admin_2]

Still think the thread title could be misleading. I mean, something like 53% of Americans believe in angels, so this is hardly a matter of concern for Zuckerberg is it?

So you're saying that 47% of America be stupid?

[Stramash]

So you're saying that 47% of America be stupid?

Double it and add 3.14159627

;-)

[FarangFarang]

Double it and add 3.14159627

;-)

47% x 2 + 3.14159627 = . . . carry the one, divide by 0, . . . infinity?

[Stramash]

47% x 2 + 3.14159627 = . . . carry the one, divide by 0, . . . infinity?

Em...no.

sigh...

[FarangFarang]

Mark Cuban: Facebook Is Driving Away Brands - Starting With Mine

Tech billionaire and Dallas Mavericks owner Mark Cuban says he is fed up with Facebook and will take his business elsewhere. He's sick of getting hit with huge fees to send messages to his team's fans and followers.

Two weeks ago Cuban tweeted out a screen grab of an offer he'd received from Facebook. The social network wanted to charge him $3,000 to reach 1 million people. Along with the screen grab, Cuban wrote, "FB is blowing it? This is the first step. The Mavs are considering moving to Tumblr or to new MySpace as primary site."

Now Cuban tells me he's doing more than considering a move - he's doing it. And not just with the Mavs but with the 70 or so companies in which he has invested.

"We are moving far more aggressively into Twitter and reducing any and all emphasis on Facebook," Cuban says, via email. "We won't abandon Facebook, we will still use it, but our priority is to add followers that our brands can reach on non-Facebook platforms first."

Cuban and other corporate Facebook members are howling because new rules on the social network make it harder for brands to reach people without spending big money on sponsored posts.

That's because in September Facebook changed the algorithm that controls which messages get through to which members. The result is that some brands a sharp dropoff in the reach of their posts - as much as 50% in some cases.

It's Not A Shakedown - We're Trying To Fight Spam

Facebook insists it isn't choking off reach as a way to push brands to spend more on sponsored posts. Facebook uses an algorithm called EdgeRank to determine which people see which posts. EdgeRank uses a lot of factors, including how often your friends log in to Facebook and what settings they choose on their news feeds, the company says.

Facebook constantly tinkers with EdgeRank to make it more effective, says product manager Will Cathcart. The algorithm change in September was a bigger change than usual, Cathcart says, but its goal was simply to cut down on spam in people's news feed.

Still, Facebook seems more determined than ever to crank up its revenue, especially as its stock price has collapsed more than 50% since its initial public offering earlier this year.

Cuban says the company's hunger for revenue is backfiring. In an email conversation, excerpted below, he lays out his case for moving away from Facebook:

Why We're Looking Elsewhere

"It's not feasible yet, but we have no choice but to continuously evaluate alternatives. We have already pushed more to Twitter. The new Myspace looks promising. And Instagram and Tumbler and others are much more open and are getting more of our attention.

"The big negative for Facebook is that we will no longer push for likes or subscribers because we can't reach them all. Why would we invest in extending our Facebook audience size if we have to pay to reach them? That's crazy.

"In many respects it has already blown up on Facebook. Their search for revenue has severely devalued every brand's following and completely changed the economics of consumer interaction."

Brands Have Made A Bad Investment

"Brands have invested in getting consumers to like their Facebook page with the presumption that every like is created equal, that the brand can reach the user easily. That is not the case.

"I realize that Facebook has never given 100% user coverage to followers of a brand. However it now appears that to extend beyond minimal reach is going to cost brands more money.

"I think this is a reflection of Facebook searching for more revenue since going public and the more it costs to reach followers on Facebook the lower the value to the brand of being on Facebook."

I Wouldn't Buy Facebook Stock

"I haven't bought [at the current price] and I wouldn't buy here. I think they have to determine what their business is right now and how they will make money at it. I don't believe they are clear about either."

Using Myspace Is Not As Crazy As You Think

"Actually, Myspace is going through a reformatting that looks pretty good. There is a greater than zero chance that it could gather quite a bit of momentum.

"In addition to Myspace, Twitter and Tumblr are both ready, willing and able to support brand activation without holding followers hostage for additional revenue. And in the ironic department, Instagram has the same friction-free reach to followers that Twitter and Tumblr have but Facebook doesn't."

Why Brands Feel Betrayed

"Facebook has never allowed 100% reach. I think the disconnect is that not everyone realized that they didnt allow 100% reach. I bet if you asked anyone who has subscribers if their posts reached 100% of their subscribers, they would say yes unless they have seen the dollar box for promoted posts show up.

"I think the same applies to brands as well. Remember most brands don't have social media departments. They rely on common sense. If someone likes your brand, it seems like common sense to me that you can expect your posts to reach 100% of those that like your brand. Doesn't it to you?"

Facebook Has A Fundamental Business Model Problem

"And one more point. I get that they want to reduce the speed at which news scrolls off of people's Facebook pages. The more stuff, the less you see; the less you see, the less you engage. All good points by Facebook.

"But it's a reflection of overall design and strategy weakness. Again, why would a brand invest in getting likes they can't reach without paying a premium?"

I'd Rather Pay An Upfront Fee

"The right price is to charge an upfront fee for brands. In the current system there is complete uncertainty on the cost. And even worse, at least for our size brands, you have to deal with the pricing for each posting, which is a time waster.

"I'm just suggesting that a single upfront fee or a monthly fee where there is certainty of cost would allow brands to focus on bringing in consumers to like the brands knowing that they can always reach everyone that likes them. I don't know what that number should be.

"And let me add, I'm not trying to come off as some Facebook expert. I'm not. I have a bunch of little companies via SharkTank and other investments that use Facebook in the normal course of business. They shouldn't have go to great lengths to figure out the nuances of Facebook audience reach. That complexity, IMHO, will come back to haunt Facebook."

http://readwrite.com/2012/11/13/mark-cuban-facebooks-sponsored-posts-are-driving-away-brands

[Admin_2]

Mark Cuban: Facebook Is Driving Away Brands - Starting With Mine

"We won't abandon Facebook, we will still use it, but our priority is to add followers that our brands can reach on non-Facebook platforms first."

And the moral of the story is...Facebook is needed...even if you're a billionaire!

It's easy to predict the future by saying that Facebook will die some day, but WTF?! Facebook is here to stay for a long time. If you want to make a prediction, give the decade when FB will be worth less than 1 billion in today's USD. That would be more interesting than saying, "What goes up, must come down."

[FarangFarang]

To me, Facebook seems like AOL or pretty much any internet fad of the last 20 years. Sooner or later it has to show a ROI for advertisers and businesses and still remain relevant to users. That's where they're having problems.

For instance, on the TF FB page, you can post something to the wall but only 20% of your users might see it. FB artificially restricts how many people see the message. The reason they do that is so they can sell you the rest of your followers. If you want to reach more of the people who have already liked you, you have to pay $5 per post. And if you want to reach even more of the people who already liked the page, you have to pay incrementally more ($10, $25, etc).

So how is that helpful if I'm the Dallas Mavs and a million people "Liked" my FB page but FB won't show my message in their timeline because I'm not paying FB?

I think Cuban's points are valid. They're fundamental problems with the business strategy. FB's market cap is a function of how much revenue they generate. Simply being popular doesn't generate revenue. They have to provide a good ROI for advertisers otherwise advertisers will spend their money to reach fewer people but more buyers.

And I don't think the message was you need FB even if you're a billionaire. It's that they'll continue to use it even though it has a poor ROI.

In other words, as soon as their is a credible alternative, many businesses will drop FB.

And as far as market cap, here's a graph.

[ATTACH=CONFIG]119914[/ATTACH]

Investors have revalued the company over $20 billion USD less in less than 6 months. FB could unwind very quickly since even at $47 billion a lot of that valuation is based on growth. They're trading at over 200x earnings still.

If they were to trade at 20x earnings, like Google currently does, the stock price would be $2.25. That would put them at around a $5 billion market cap.

Will it happen tomorrow? Probably not. But over the next 5 - 7 years I can see FB slowly sliding down in both usage as well as revenue growth.

I think where you and I differ is that the way I look at it FB doesn't have to go out of business to die. AOL didn't go out of business but they are no longer the main way people access the internet anymore. Yahoo didn't go out of business but it's far less relevant today than it was back in 1998.

And size is not a determining factor. Everything is accelerated today. Look how long it took the telephone and electricity to gain 40% market share.

[ATTACH=CONFIG]119915[/ATTACH]

For a new product or service to get 40% market penetration, it will take far less time today than it took FB to get to 40% market share.

Most people didn't even know what a social network was 10 years ago. Now, everyone's on one (or more). A competitor who figures out mobile platforms and offers a better ROI for advertisers could easily surpass FB in 5 years. You don't need to educate people on what a social network is anymore. They'll go where they see the most value.

[FarangFarang]

Facebook Collects Tons of Data and Still Can't Cut It for Advertisers

The promise and allure of Facebook was that it would be the new advertising mecca. Their analysis of users' habits would allow precise targeting of potential customers. No longer would advertisers waste millions of dollars in television's vast wasteland or buy ads in print outlets around the country. Simply trust the geniuses at Facebook to gather the data, and then sit back and just watch the money roll in.

As with most "great ideas," Facebook failed to live up to its promise of delivering advertising results. Growth in advertising continues to slow as Mark Zuckerberg and his minions struggle to demonstrate their value to marketers. The biggest Facebook fiasco came just before the company's infamous IPO, when General Motors pulled its $10 million advertising budget, claiming the ads just didn't work. In July The Wall Street Journal reported that the two companies were in talks to resume advertising, provided Facebook can supply concrete data that proves the value of its advertising.

A Billion Users and They Can't Deliver Value. What's Wrong?

MIT Technology Review recently ran some fascinating articles on Facebook. Their July/August feature story, "What Facebook Knows," reported that, with the company's social scientists looking for human behavior insights, they could provide Facebook with new ways to cash in on our personal data. Think about the information that Facebook's "Data Science Team" has access to, which you voluntarily provided to them:

Complete listings of friends and family members.

Private and public conversations.

Photos of life events.

Details of day-to-day activities.

Knowledge of your likes on a wide variety of topics.

Listings of businesses you've frequented and trips you've taken.

Relationship status.

Age, gender, birthday, telephone, address, and email contact info.

Web pages that you've "liked."

Songs you've listened to and articles you've read.

In the same issue a review by Michael Wolff, "The Facebook Fallacy," claimed that for all its valuation Facebook is just another ad-supported site without any earth-shaking ideas that it can use to unseat traditional advertising media. It collects all this data but isn't informing advertisers of its value. The small ads pop up on the side of a user's page with minimal to no targeting whatsoever, and they cannot really supply any information regarding conversion rates. There is no personalization for the user experience and no engagement. In the September/October issue Peter Glassman provided feedback that wondered why we even give Facebook our personal information so willingly when the only thing they give us in return is more advertising.

What is wrong here is that, despite its impressive accumulation of users and data, Facebook is still unsophisticated in packaging this information for advertisers. This is similar to what we are seeing in all social media, which is really still in its infancy when it comes to advertising. The problem is that marketers are looking at this as another way of communicating in a mass way when people consume social media in a different way than they consume mass media.

The solution lies not in just blindly accumulating more data, but in garnering real understanding. Facebook has amassed an enormous amount of information, but they have not yet developed the sophistication to deliver this data in a meaningful way. They need to do less pure data mining and take an anthropological approach to evaluating their data in order to deliver true understanding and usefulness to marketers.

How can we use the power of social media to influence behavior and effect change? Clearly, if Facebook isn't capable of achieving changes in buying behavior with all of the information it has at hand, how are we mere mortals to ever accomplish our goals? At Lucule, we are developing a model called the Social Media Pénte, which will provide communicators with the benefit of the knowledge that social media users have changed their habits and will pay attention to their messages in a different way.

No longer will it be effective to communicate in a mass media way when the target audience is consuming in a personal media way. This model, which we previously referred to as the Cube, is itself evolving as we work with clients and gain more understanding of its five facets: type of message, when it is received, "socialness" of its recipient, medium and delivery device. Understanding the way people use social media means the kind of promotional and marketing programs consumers will pay attention to and respond to with their purchasing dollars.

Social media is not set up to be effective for advertising, but to be used for communicating. Those who want to use social media as a real form of influence will need to bring passion, perseverance and cultural insights based on anthropological underpinnings into play as they learn to use it as the personal communications tool it was meant to be.

http://www.huffingtonpost.com/jure-klepic/facebook-collects-tons-of_b_2158945.html

[kaunitz]

Facebook Collects Tons of Data and Still Can't Cut It for Advertisers

What I think is that FB is just drowning in information. They are collecting virtually everything about their members, things they want to share and things they don't want to share. Information management is a tricky thing, as I could experience. Just gathering data is not the thing that helps, you have to analyze it and to assess it. Especially the latter is a big hurdle - also as I could experience in my field. I would not say this is typical American (as we could see with CIA, just e.g.) as in other countries/organizations you can see the same thing. Everything is just put into databases and the database managers are very proud of the loads of information they gather, but there is no one able(?) to make a valuable assessment of all the info available. Actually, I am not surprised, but I think that especially from FB, there are other organizations taking their advantages of. Whether or not they are able to make a good assessment is another thing but for me, the real problem is that info and data one thinks is confined to a certain basket does not remain there. Well, actually, we all should know. But still, just to take me as an example: In FB, I am quite reluctant to give away personal info but still people can create a profile of me because of my likes, clicks on pages and so on. On the other hand, on TF, I am a bit more open (although still not opening my deepest heart). And all this without knowing who else is reading all this, legally or by the way of hacking. Once you are online, you are giving away info, and as there are nearly billions of people, there is lots of information. This might save us because - as I said before - it is the information overkill.

[FarangFarang]

[h=1]Why I'm quitting Facebook[/h]By Douglas Rushkoff, CNN

(CNN) -- I used to be able to justify using Facebook as a cost of doing business. As a writer and sometime activist who needs to promote my books and articles and occasionally rally people to one cause or another, I found Facebook fast and convenient. Though I never really used it to socialize, I figured it was OK to let other people do that, and I benefited from their behavior.

I can no longer justify this arrangement.

Today, I am surrendering my Facebook account, because my participation on the site is simply too inconsistent with the values I espouse in my work. In my upcoming book "Present Shock," I chronicle some of what happens when we can no longer manage our many online presences. I have always argued for engaging with technology as conscious human beings and dispensing with technologies that take that agency away.

Facebook is just such a technology. It does things on our behalf when we're not even there. It actively misrepresents us to our friends, and worse misrepresents those who have befriended us to still others. To enable this dysfunctional situation -- I call it "digiphrenia" -- would be at the very least hypocritical. But to participate on Facebook as an author, in a way specifically intended to draw out the "likes" and resulting vulnerability of others, is untenable.

Facebook has never been merely a social platform. Rather, it exploits our social interactions the way a Tupperware party does.

Facebook does not exist to help us make friends, but to turn our network of connections, brand preferences and activities over time -- our "social graphs" -- into money for others.

We Facebook users have been building a treasure lode of big data that government and corporate researchers have been mining to predict and influence what we buy and for whom we vote. We have been handing over to them vast quantities of information about ourselves and our friends, loved ones and acquaintances. With this information, Facebook and the "big data" research firms purchasing their data predict still more things about us -- from our future product purchases or sexual orientation to our likelihood for civil disobedience or even terrorism.

The true end users of Facebook are the marketers who want to reach and influence us. They are Facebook's paying customers; we are the product. And we are its workers. The countless hours that we -- and the young, particularly -- spend on our profiles are the unpaid labor on which Facebook justifies its stock valuation.

The efforts of a few thousand employees at Facebook's Menlo Park campus pale in comparison to those of the hundreds of millions of users meticulously tweaking their pages. Corporations used to have to do research to assemble our consumer profiles; now we do it for them.

The information collected about you by Facebook through my Facebook page isn't even shared with me. Thanks to my page, Facebook knows the demographics of my readership, their e-mails, what else they like, who else they know and, perhaps most significant, who they trust. And Facebook is taking pains not to share any of this, going so far as to limit the ability of third-party applications to utilize any of this data.

Given that this was the foundation for Facebook's business plan from the start, perhaps more recent developments in the company's ever-evolving user agreement shouldn't have been so disheartening.

Still, we bridle at the notion that any of our updates might be converted into "sponsored stories" by whatever business or brand we may have mentioned. That innocent mention of cup of coffee at Starbucks, in the Facebook universe, quickly becomes an attributed endorsement of their brand. Remember, the only way to connect with something or someone is to "like" them. This means if you want to find out what a politician or company you don't like is up to, you still have to endorse them publicly.

More recently, users -- particularly those with larger sets of friends, followers and likes -- learned that their updates were no longer reaching all of the people who had signed up to get them. Now, we are supposed to pay to "promote" our posts to our friends and, if we pay even more, to their friends.

Yes, Facebook is entitled to be paid for promoting us and our interests -- but this wasn't the deal going in, particularly not for companies who paid Facebook for extra followers in the first place. Neither should users who "friend" my page automatically become the passive conduits for any of my messages to all their friends just because I paid for it.

That brings me to Facebook's most recent shift, and the one that pushed me over the edge.

Through a new variation of the Sponsored Stories feature called Related Posts, users who "like" something can be unwittingly associated with pretty much anything an advertiser pays for. Like e-mail spam with a spoofed identity, the Related Post shows up in a newsfeed right under the user's name and picture. If you like me, you can be shown implicitly recommending me or something I like -- something you've never heard of -- to others without your consent.

For now, as long as I don't like anything myself, I have some measure of control over what those who follow me receive in my name or, worse, are made to appear to be endorsing, themselves. But I feel that control slipping away, and cannot remain part of a system where liking me or my work can be used against you.

The promotional leverage that Facebook affords me is not worth the price. Besides, how can I ask you to like me, when I myself must refuse to like you or anything else?

I have always appreciated that agreeing to become publicly linked to me and my work online involves trust. It is a trust I value, but -- as it is dependent on the good graces of Facebook -- it is a trust I can live up to only by unfriending this particularly anti-social social network.

Maybe in doing so I'll help people remember that Facebook is not the Internet. It's just one website, and it comes with a price.

http://www.cnn.com/2013/02/25/opinion/rushkoff-why-im-quitting-facebook/