Facebook Inc (NASDAQ:FB) had another strong quarter, with over a billion active daily users, but CFO David Ebersman did admit that the company had a “decrease in daily users, specifically among younger teens.” A small dip is no reason to worry that the company is suddenly going under, but the nonchalant response from some analysts also seems out of place.
“Given Facebook Inc (NASDAQ:FB)’s performance in the third quarter of the year, who really cares?” Zoho Corp president Raj Sabhlok wrote in Forbes. “Whatever the situation with teen Facebook users, here’s what most of us actually do care about — making full use of social media and networking technologies that are here to stay.”
Why people stay on Facebook?
But that’s precisely the point. Despite all the complaints about confusing, shifting privacy policies, the annoying interface, and a messaging system that almost seems designed not to be useful, people stay on Facebook because practically everyone you know is there. In many social circles not having a Facebook account is as uncommon as not having a phone number.
Why people switch platforms?
But if that ever ceases to be true, if you know more people on Google+ than on Facebook Inc (NASDAQ:FB), than switching should happen naturally as you interact with friends on the platform most of them use. Having a huge existing user base is certainly an advantage, but if you think that advantage can’t be squandered you should try to contact someone through their MySpace or Friendster account. At one point a huge majority of American internet users all had AOL accounts. Going slightly afield, the rapid unraveling of BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) is yet another example of how quickly a tech company can go under if its brand becomes badly tarnished.
And that’s why people should care about a decrease in users, especially younger users who are currently developing lifelong habits. If the numbers flatten out or start to go back up in the next quarter then everyone can look back at this as a blip, but if they decrease further investors will need to take note. It only takes a few minutes to create an account with a rival service, and it would only take a few bad quarters before someone else will step up and take the market share that Facebook Inc (NASDAQ:FB) is losing.