WSJ: Facebook's fast growth days likely over
updated 06:26 pm EDT, Mon June 11, 2012
Key metrics level off, no obvious room to maintain rapid growth
The world's largest social networking site may well be beyond its best days of growth, according to an analysis in The Wall Street Journal. Facebook rose to the top of the social web through sustained, meteoric growth, but recent figures show that the site is taking on users at a rate much slower than it did in previous years, and user engagement with the site may be leveling off as well.
The analysis is based on the most recent figures from research firm ComScore. Those numbers show that, in April, Facebook had 158 million unique US visitors, up five percent from the year previous. That five percent figure represents a significant slowing in Facebook's US growth, as the same metric was 24 percent at the same point in 2011 and 89 percent in 2010.
The ComScore figures also showed similar decelerations in the amount of time users are spending on the site. So far, the amount of time Facebook users spend on the site per month is up 16 percent from a year previous; but in 2011, that figure was 23 percent, and in 2010 it was 57 percent.
Facebook, of course, is far from failing, as it is still one of the most popular sites on the web, and its users spend more than six hours a month on the site. Still, the new figures support a notion that Facebook itself hinted at in its pre-IPO S-1 filing: namely, that the site has now matured in terms of audience.
With nearly a billion users worldwide, Facebook has achieved a degree of market saturation that no other social network had managed before. As such, analysts are predicting that the company will not be able to increase earnings in the manner seen with Google, which benefited from new Internet users during its rise and was able to snatch market share from competitors. Facebook has room to expand overseas, but the international social networking market is of little import to American advertisers and app developers, which constitute the majority of Facebook's revenues.
The company can also grow its standing in the mobile sector, as its executives have previously confirmed was a goal; but Facebook has struggled with generating real growth from its mobile advertising efforts, as Facebook ads don't work as well on smaller mobile screens as they do on desktops and notebooks. The company has been making a big push in mobile recently, specifically in the app sector, but the ultimate impact of these moves remains to be seen.
