Is the sky falling? Perhaps in the business world of online social networking as analysts struggle to understand an incredible decline in user base for the Mecca of all networks, Facebook.
In May of 2010 Facebook realized a new user growth of almost eight (8) million individuals in the United States of America alone. Yet in the month of June that number declined to only 320,000 new users.
Declined is perhaps an inadequate reference. Plummeted seems more appropriate and in one of its highest performing and strongest growth demographic groups (under age 35).
Part of this decline may due to the natural obsolescence of novelty games provided by the software platform. The top three most popular game applications were all introduced in 2009. According to date from Insidesocialgames.com the popular application Farmville realized a loss of -7, 711,965 players in the month of June, 2010 from 78, 372, 815 users in May.
What the data may actually be reflecting is not a change in interest in Facebook but a demand for new and interesting applications. This should have developers racing to create the next best thing.
In relation to a similar decline in UK users in 2008 (the decline was noteworthy and prompted speculation about Facebooks growth although it was only a mere 5% loss in it’s British user base). At that time Alex Burmaster an internet analyst at Nielsen Online, said that it was “inevitable that the site’s early growth rates could not be sustained and user numbers were likely to plateau.”
Analysts and investors alike are bracing for the statistics for July 2010 to mark whether this is the beginning of a marked trending or simply a random occurrence.
Many speculate that concerns over the safety and privacy of user information plus increased announcements to add more “pay per click” or “pay per play” features to the historically “free use” site may have alienated some users.
As with any product or commodity, social networking sites must invest in effectively communicating value proposition to the customers to retain long term use of the Facebook well beyond the novelty period. Items which reward long term gamers (loyalty strategies) have proven effective for other platforms but are curiously not employed in mini-applications, which are often viewed as short term and possibly disposable.
If the June 2010 statistics are an indicant of a declining trend, Facebook will need to shake things up a bit by adding exciting new applications before the digital migrants seek their entertainment elsewhere.
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Source: Web July 13, 2010
http://www.insidefacebook.com
http://www.readwriteweb.com
http://insidesocialgames.com
http://news.bbc.co.uk
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