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The Future of Facebook

Facebook is like the Beatles.

They weren’t the first rock and roll band*. But they popularised rock and roll and changed culture in the process. They were huge in their day. But they were never going to dominate the charts forever.

Facebook will not be on top forever. Possibly not even as long as the decade the Beatles managed.

Facebook’s business is inherently trend-based. It very quickly loses its appeal once the people in your circle begin to abandon it. And in some markets people are clearly leaving Facebook. Three different analyses in recent weeks show the active user base falling by millions in the UK and US.

Facebook is still gaining users overall but only because new users in developing markets are offsetting the losses elsewhere. This may go some way to explain the declining revenue per user — down 12% quarter on quarter even though the proportion of mobile users has climbed. Developing market users may be numerous but they are worth less individually in advertising revenue.

The question about Facebook was never if it was going to be superseded but when. Two years ago I said we had seen the beginning of the beginning of the end. Now I’d say we have seen the beginning of the end.

It will be slow at first but I believe the decline and fall of Facebook has begun.

*If you heard 5live this morning, yes I do count the beatles as rock and roll, no matter what Nicky Campbell might say.

Tom Cheesewright