Facebook’s initial Mission Statement was “Making the world more open and connected”. Last year, they tweaked it to be “Bring the world closer together”. Based purely on my own Facebook experience, while they may think they are working toward their mission, I think instead that their real mission is to become an advertising machine. Can’t fault them for it, nor can I fault the companies that advertise on Facebook – it is not news that companies are in business to make a profit. Also based on my admittedly anecdotal experience, I think the engagement level of Facebook users has dropped considerably. I will explain below.
2007
I was a relatively early Facebook user. My Timeline says I started using Facebook in 2007, so I have been on it for about 10 years. During the first few years, it was great to “Friend” so many friends, relatives, and acquaintances from the past years of my life that I hadn’t heard from in a very long time. I really enjoyed (and still enjoy) reading about what people have done or are doing, what they are thinking or feeling, and especially photos of their experiences and their children and families. At that time, most users actually posted stuff – I’m guessing well over 50% of users were actively involved in keeping the rest of us updated with the goings-on in their lives. It was very nice!
As the years have gone on, however, I have seen this level of what I call “active engagement” drop significantly. It seems that Facebook is now following the 80/20 rule that many other enterprises face: 20% of the users are making 80% of the postings. It may even be more like 10% and 90%. At the same time, posted advertising has grown significantly, as has, in my case, articles posted from publications that I am “following”. Whereas it used to be that 80% of what I saw on Facebook was postings by user “Friends” and 20% by advertisers or other of my “followings”, now that seems to have flipped to 80/20 the other way. So, the 20% of my Friends who actually post comprise only 20% of what I actually see on Facebook. At least that’s how it seems to me, in my unscientific, anecdotal observations. Are you observing the same phenomenon? Or am I out to lunch?
Mathematics
I also question some of Facebook’s mathematics. As of 3rd Quarter 2017 (the latest data available), Facebook claimed to have just over 2 Billion registered users, of which over 1 Billion, or 50%, is “active” as defined by logging in to Facebook at least once per month. The World’s Population is about 7 Billion – maybe a little more, but let’s use that. That means Facebook claims that 29% of the World’s population is a Facebook user, and 14% of the World logs into Facebook at least once per month. Does that make sense to you? Think about every person you know – that includes friends and family, neighbors and their children, everyone you went to high school and college with, and everyone you have worked with over the years. If you are on Facebook, does it make sense that almost 30% of Everybody You Know is a Facebook user? That includes people in Africa and India that still don’t have running water or electricity, not to mention Internet access so they can even access Facebook. Something to me doesn’t add up.
IMO
I am not posting this as a warning that you should sell Facebook stock. In fact, I own it, albeit indirectly, through my ownership of various ETF’s. I am simply questioning whether Facebook is really following its own Mission Statement and if its true level of engagement might be a bit overstated. I am not doubting Facebook’s internal metrics as to how they calculate registered users, and I am certainly not dissing the level of revenues and profits they are generating. I do believe the breadth and the depth of engagement in Facebook is overestimated. I don’t know what that means for Facebook’s future but it is still a growth story. How deeply it sticks with and how much difference it makes in greater society remains to be seen.