Facebook No Longer Home to Teens Post on NEWS WATCH by Taofeek Odedina

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A few weeks back, Facebook (NASDAQ: FB) announced the Home function that again grabbed the media attention similar to Graph search back in January and several other initiatives recently. While the market continues to debate the importance of these new functions, it continues to ignore that teens are leaving the social network in the millions. This is good news for stocks such as Google (NASDAQ: GOOG) and Yelp (NYSE: YELP) that could be impacted if Facebook was ever successful with these new initiatives.

The leading internet social media firm had surged to a market cap approaching $70 billion back in January based on the expectations that these big initiatives will lead to surging revenue growth. What investors generally missed is that these new initiatives came with additional costs that will limit earnings growth this year.
While the market focuses on the monetization initiatives such as Home, the existing users on the platform don’t appear as eager to stick around for these new services. Facebook is not ensured to be the social media outlet of choice in the future. Back in January, the evidence suggested that domestic users had peaked. Now, it appears that the younger crowd is leaving the service in droves.

Is Home even important?

As with the Graph search function in January, the Home function is an attempt to place the genie back in the bottle. Initiatives such as home are possibly leading to the user base fleeing as Facebook quickly goes from a free service absent ads to one where the company attempts to hock every move made by a user.

Facebook claims that the Home function turns an Android phone into a living, social phone. It turns the focus of the phone to people and away from apps. The question is whether users actually want this service. Most people constantly use business, games, sports, and weather apps outside of Facebook questioning any desire for this new service.

The service appears to be another attack on Google similar to that of Graph search. While the company claims that the service isn’t an operating system, it clearly takes several steps towards overwriting Android. It could just be the first step to creating a full-blown OS.

Teen users plunging

The bigger issue not generally addressed is that all the new revenue monetization issues won’t matter if Facebook follows the path of all other social networks. Eventually users tire of the service and move onto the next hot social network. The new set of teens aren’t as interested in following the footsteps of the teens from 5 years ago akin to a nightclub typically having a limited length of popularity.

As the previous article pointed out, SocialBakers was already showing that users in the U.S. were peaking. Part of the problem is a matter of size as nearly 69% of internet users were on the site. In reality, the data now confirms that not only did the user base peak back at around 170 million, but also it is now dropping with the younger crowd leading the downturn.

Culled from Motley Fool

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2 thoughts on “Facebook No Longer Home to Teens Post on NEWS WATCH by Taofeek Odedina

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