I ran across some interesting research recently conducted by the Pew Research Center:
There's a lot of stuff in here to digest. But there are a few points that caught my eye worth thinking about:
"Focus group discussions with teens show that they have waning enthusiasm for Facebook."
The basic point here makes sense when you step back and think about it. Facebook has had a tremendous run since its inception. But the problem is that at some point things like this can lose their "cool" factor and many will be up and running to the next big thing. It wasn't all that long ago where MySpace was apparently the place to be. Now...not so much.
"Users of sites other than Facebook express greater enthusiasm for their choice."
Understandable...it's something different.
"Teen Twitter use has grown significantly: 24% of online teens use Twitter, up from 16% in 2011."
Very believable. Twitter is a far better mobile experience and the data points toward Twitter catching hold with a lot of folks. Twitter now has over 500 million registered users and even more interestingly handles over 1.6 billion search queries per day. And we all know how valuable search can be. Just ask Google. It's no wonder Facebook is pursuing their Graph Search initiative. How's that going by the way?
Investors in pure play social networks like Facebook need to keep in mind that there is a genuine risk of active users defecting for any number of reasons. Particularly if it gets to a point where any given social network becomes invasive or even worse, uncool. And I would argue that Facebook is walking that line for sure. It's not to say that something like Google isn't necessarily invasive. If you use the Internet you can guarantee that your behavior is being tracked in some capacity. But there's a difference between explicitly and implicitly getting information. Google certainly seems to be more of the latter.
Google started with search and migrated elsewhere. Facebook and other social networks are doing it the other way around. A bit trickier in my opinion and I think that the market is telling us today that it's not so certain yet that Facebook will be able to pull it off. When Twitter goes public I'll bet it receives the same scrutiny. Let's just hope they're watching Facebook and taking notes.
My name is Jason A. Moser and I'm lucky enough to have a job doing what I love to do: investing. But my family, golf, music, reading, writing, current events...these are all things that matter to me. Consider yourself warned.