A Crippling Blow to Facebook?

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By Douglas A. McIntyre Published
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One of the strengths of Facebook Inc. (NASDAQ: FB), perhaps second to its one billion users, is the amount of time people spend on the social network. That length of time has been lauded as one of the reasons advertisers should use the site to market products and their images.

A new study from Pew Internet & American Life Project shows that people have begun to take very long breaks from their use of the world’s largest social network. That, in turn, could hurt its appeal to marketers and erode Facebook’s sales and precious revenue growth.

Pew reports:

  • 61% of current Facebook users say that at one time or another in the past they have voluntarily taken a break from using Facebook for a period of several weeks or more.
  • 20% of the online adults who do not currently use Facebook say they once used the site but no longer do so.
  • 8% of online adults who do not currently use Facebook are interested in becoming Facebook users in the future.

Pew points out that 67% of American adults use Facebook, which makes the problem all the more extreme.

The reasons many people have begun to use Facebook less are all very bad for the company. Pew points out:

The largest group (21%) said that their “Facebook vacation” was a result of being too busy with other demands or not having time to spend on the site. Others pointed toward a general lack of interest in the site itself (10% mentioned this in one way or another), an absence of compelling content (10%), excessive gossip or “drama” from their friends (9%), or concerns that they were spending too much time on the site and needed to take a break (8%).

The worst of these is “an absence of compelling content.” Facebook has never been able to solve the puzzle of how to get much more outside content into the experience of its users. That leaves these people little more than their relationships with friends. Even in the real world, friends become tedious from time to time. Arguments drive wedges between them, some of which last forever.

The other problem Facebook clearly faces is the Internet clutter one. Most people are only willing to spend only so much time online. They have commutes to make, food to prepare, sleep to get, and spouses, children and friends to deal with in the real world. Facebook competes for online time with a galaxy of news and information, entertainment, e-commerce and other social communications destinations, such as Twitter. The decision about how people use this Internet time has begun to move against Facebook, if the Pew survey is even close to being accurate.

Facebook’s appeal is hardly over, but it may be in a period of erosion that it cannot realistically prevent.

Pew methodology: The PSRAI December 2012 Omnibus Week 2 obtained telephone interviews with a nationally representative sample of 1,006 adults living in the continental United States.

Photo of Douglas A. McIntyre
About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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