Facebook revenue in the fourth quarter of 2013 skyrocketed to $2.59 billion. Shares of the company hit an all time high early Thursday, with the stock price reaching $62.30. With a market capitalization well over $130 billion all is well on paper; however, a question that is echoing throughout the physical world is whether they will continue to rise, or if their user base will slowly fade away.
Over 25 percent of high school aged users in the U.S. have abandoned the social media website over the past few years, according to a recent report. College aged adults are following suit. The novelty Facebook once provided seems to be wearing off and people young and old are investing more of their social networking time into other platforms like Snapchat and Instagram. This could be a cause for concern for share holders, as millions are fleeing the Mark Zuckerberg creation.
With the constant targeted advertisements coupled with less interaction between friends, the flavor that once was seems to be bland at best. Many studies have been conducted over the past couple of years highlighting the negative impact the page may be having on our society. Social media is becoming less important to its founders than operating their enterprise. Design is focused more on advertising revenue and paid posts are threatening the unique experience that made FB great. Boasting the second most visited website worldwide, next to Google, has turned the networking site into a powerhouse. Will they keep posting gains and continue to rise, despite concerns from users, or do we need the next Tom or Mark to unveil something new?
As far as making money, they are doing the job. Chief Financial Officer David Ebersman spoke of ad prices rising 92 percent in 2013 and they are expected to continue to rise this year. Video advertisements will be on your newsfeed soon enough if they aren’t already. Analysts suggest those ads should grab an additional $1 billion in revenue this year. Favoring paid posts and promotions, members are seeing less interaction and feedback from their online friends, with user capital and data in high demand. Another FB owned company is thriving with a simple interface and less interference, however Instagram is said to soon begin monetizing its user base more as well.
This could be a fluke. Maybe the social media giant is indeed here to stay. According to the Pew Research Center, 61 percent of users that deactivate their account end up coming back. That bodes well for those that do find enjoyment and yield positive results from Facebook.
Numerous behavioral studies suggest that the site has had such a profound impact on their visitors that people are becoming more isolated and narcissistic as a result. The ability to tune out the real world, block people from a profile, and see how many “friends” one can tally, is said to be causing a decrease in face to face contact. The once great tool is so far embedded in society that Cornell University professor, Jeffrey Hancock, has concluded that users of the site are now mostly just interested in how others view them. Likes are praise, and people are so fascinated with the attention, that they are actually ending up less happy overall. Value is being placed on users for marketing, and without paying for posts, people are seeing less of what they want to see. Some have observed human interaction as becoming more virtual, and realities are becoming distorted. This is leading some to question as to whether Facebook’s value will continue to rise.
Perhaps people really are getting bored with Facebook and will find other ways to distract themselves. Then again, maybe FB is just getting bored with catering to their members.
By Vyctor Andres