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Analysis

How Facebook Lost Its Mojo

Even if you're Mark Zuckerberg and your company single-handedly impacted the way billions communicate, when you can’t attract new users, the future is bleak

Todd Wasserman
January 08 2019

When Facebook releases its personalized Year in Review videos for 2018, it may end up struggling for material. A recent Pew Research Center survey found that 42% of users have backed off from visiting the site daily, while 26% have deleted the app from their phones.

Though Facebook has hedged its bets by purchasing Instagram and WhatsApp, Facebook’s stock has been taking a beating. At this writing, Facebook was trading for around $150 compared to a high of $217 in July.

While Facebook proponents argue that consumers overstate their aversion to the social network, it’s clear that many have tuned out. The more this trend continues, the more consumers will fall out of habit of visiting the site. If Facebook can’t attract new users, it will follow in the footsteps of Yahoo, a once-dominant platform fallen into years of steady decline.

The privacy factor

An obvious catalyst for the Facebook exodus was the Cambridge Analytica scandal. In March, press reports surfaced that Cambridge Analytica, a British data firm, had obtained access to data from 50 million Facebook users. The firm used that information on behalf of the 2016 presidential campaign for Donald Trump.

Cambridge Analytica mapped Facebook users’ personality traits and used that data to target ads. A consumer that Cambridge Analytica had identified as anxious would receive one ad, while an “angry introvert” might receive another.

Though the advertising industry knew that Facebook used signals such as likes and posts as data for ad targeting, many consumers didn’t — or such use of their data wasn’t top of mind. The scandal made clear to everyone that Facebook was engaging in what some call “surveillance capitalism,” by which it monetized what consumers thought were innocent interactions with friends and family. While many Facebook users were unfazed, a significant minority could no longer look at the social network the same way.

The time-wasting factor

For some, Cambridge Analytica was the tipping point in a long-simmering decision to break up with Facebook. That’s because at its height, users were spending 50 minutes a day on the site. Many began questioning what kind of return they were getting for that time.

Research showed that the longer someone spent on Facebook, the worse they felt. There are several reasons for this. Most people don’t communicate on Facebook, instead passively consuming information. Such activity, researchers found, isn’t satisfying or fulfilling. Another oft-cited reason is that looking at friends’ posts sparks envy, a negative emotion. Facebook users also feel pressure to suppress bad news and present a falsified, airbrushed version of their lives, which further perpetuates this effect.

Finally, many productivity experts have recommended that consumers delete Facebook from their phones. For consumers who already felt that Facebook was a time-suck, the privacy scandal provided another reason to distance from the network.

The network effect

Facebook took off in large part because of the network effect. That means it got more useful to the average user as more people joined. If all your friends and family members are on Facebook, suddenly it becomes the most effective way to keep in touch.

But the reverse can also be true. If large amounts of people stop going to Facebook daily, the site could become a ghost town. As a result, visits to Facebook would become less rewarding, leaving consumers with less incentive to visit. This downward spiral is exactly what happened with other social networks, like MySpace, Friendster, and Google Plus.

The network effect could also be Facebook’s saving grace, though. When networks get too large, they become less useful for visitors’ needs – which a Wired article defined as connection, content and clout. All three are diminished when a network gets too big. (Too many users increases the signal-to-noise ratio, for instance.)

While declining user numbers may make Facebook more useful to some, the company still needs to do a better job protecting its users’ privacy. A September breach exposing the data of 50 million users underscored how behind Facebook still is on this front.

Maybe Facebook is just on the wrong side of history. There is a growing belief that consumers should be in control of the data they produce online.  The introduction of GDPR in Europe and California’s pending data privacy legislation indicate that many users are starting to understand the value of their data. On the commercial side, World Wide Web inventor Tim Berners-Lee has introduced Solid, a new framework that lets users control the use of their data. Accenture has promoted a similar idea.

Future social networks may give consumers more control of their data. Such an idea might be especially appealing for younger users, who don’t want a permanent record of their youthful indiscretions following them throughout their lives. Whatever the case, it’s dawning on many that they’ve been giving Facebook a lot – and not getting much in return.

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Todd Wasserman

Todd Wasserman is a journalist with 25 years of experience. He has been freelancing full time since 2015. Before that he was the business editor for Mashable from 2010-2015. From 1999-2010 he worked at Adweek's Brandweek, starting as a reporter and ending as editor-in-chief (2007-2010). He has written for The New York Times, The Wall Street Journal, Wired, The Washington Post and The Economist, among other publications.

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