Facebook’s User Growth Ends After Consistently Increasing for Nearly Two Decades
Facebook Hits a Wall
As Meta Platforms (FB) released its earnings report on Wednesday, an unexpected data point emerged: Facebook’s user growth has stalled for the first time in its history. Analysts note this marks the end of an 18-year-long trend during which the social media giant consistently added users. This week’s discovery and the news that Facebook in fact experienced a net loss of users in some markets sent the stock price tumbling.
Sources indicate CEO Mark Zuckerberg has privately warned this could happen. Analysts explain the “network effect” that helped Facebook’s rise in popularity for the better part of two decades could also cause exponential user-base losses as internet trends shift elsewhere. Meta Platforms disclosed this week that competition from other platforms like TikTok has contributed to stalled growth.
Natural Constraints and Changing Trends
Some analysts argue Facebook’s growth was bound to level off at some point given its extreme popularity: there are only so many people in the internet-connected world, most of whom use Facebook already. Some Facebook users disclose they only use the site for specific things like wishing someone a happy birthday. In the recent past, the company has acquired other platforms such as Instagram and WhatsApp to attract new users.
Executives are also focused on trying to retain existing users. For example, Meta Platforms’ growth team constantly looks for problems that may cause people to leave Facebook, such as bugs that keep users from logging in or accessing some parts of the platform.
How Facebook Is Responding
Analysts argue Facebook needs to increase the amount of new content featured on the platform. Meanwhile, executives are seemingly focused on pushing Instagram’s Reels, which functions similarly to TikTok. Instagram also now shows posts from accounts users aren’t following, and groups are aggressively pushed on Facebook as well.
All of this continues while Meta Platforms faces scrutiny from antitrust regulators and the possibility of new legislation, making new acquisitions difficult. The company’s name change in October of last year also demonstrates its commitment to the metaverse, which analysts claim is unlikely to become a profitable sector anytime soon—if, perhaps, ever. Still, many industry observers identify Facebook’s failure to keep growing its user base as the most pressing concern.
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