Princeton researchers recently published a paper predicting the death of Facebook! No matter what you and I believe, it is hard to avoid listening to those Princeton “smarties” without giving them an ear. It claimed that Facebook will lose 80% of its users by 2017. Simply put, they used a model that predicts the death of Facebook based on its blazing rate of adoption (like a disease), combined with its decreasing rate of adoption among new users of social media. No matter whether a “disease” model can be applied to the adoption of Facebook or not, the authors eventually based their claims by referring to previous successful attempts of explaining the “spread of ideas” with the “spread of diseases”. The whole paper can be downloaded here (only for advanced readers).
Talking about the death of Facebook or about weakening popularity of it, is not a very recent phenomenon.The Forbes magazine also commented in one of their issues in 2012 about why Facebook might die and twitter would live. So what is the fuss about it?
I would like to dissect the whole issue and look into it from two different views. First one is from the view of product life cycle (or brand life cycle, to be more specific). Just like a brand may die and sometimes gets a make-over to restart its life, the same is theoretically possible to Facebook. The recent trend of decreasing popularity of Facebook and increasing popularity of Twitter have alarmed the social network strategists to fear the life of Facebook.
In real life, the business world has seen such ups and downs in the life of a brand. Xerox and Polaroid could be good examples. Privacy issues have been big concerns lately since Facebook allows so many third-party apps and games. About revenues, a big part of Facebook’s income comes from advertising. With the falling user base, the advertising revenue might hurt in future as advertisers would spend somewhere else. With its current set-up and make-up, it seems Facebook needs to re-design a lot of things to keep going. So the first issue is about usual life-cycle that any brand may experience.
The second one is from the view-point of business dynamism and adaptation of strategy. (Read More)