The Grandmother effect is starting for Facebook

1. There seems to be this weird assumption in your post that teenagers get to decide what’s cool and what isn’t.

   To my mind one of the advantages of Twitter was that it doesn’t appeal to teenagers too much. I have no objections to Facebook going the same way.

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2. I agree with you, but I noticed another trend. I’m starting to get invites from my nephews and nieces who want suckers for Farmville.

   Facebook is becoming a social games platform for tweens!

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3. Mate :)
   Your prediction has failed on all counts. In the last 6 months facebook has climbed from 350 million users to 400 million. And yes it has more users in the ‘Gran’ or ‘mother’ demographic than other networks because it has way more users than other networks period. You yourself admit you don’t use facebook nor do I (much), but it has and continues to do so – added new features and services all the time. It outcompetes google buzz and its integrated full mail service (Project Titan) will give gmail a run for its money.
   You underestimate a platform you don’t understand nor have made an effort to before writing this post :) Mate :)

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   1. The bar is bulging at the seams Siobhan – and while it is a fun time for now, the article is showing that at least some early signs are out there.

      It was the same back in the MySpace days – we heard more and more about the increasing growth right up until the day that it disappeared from relevancy for most groups.

      It was the same for NZ Music, which was so cool it was black background and white text (and unreadable.)

      So are the cool kids leaving yet? I don’t know, but I do know that the self-described cool kids are not going to want to hang out in the same place as the rest, and Facebook’s critical mass may end up being defined in the nuclear sense rather than the economic sense. Lance

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      1. why the fixation on cool kids? facebook,twitter etc aren’t pandering to them. If you watched what facebook are doing and were familiar with MySpaces’s mistakes (and MySpace is far from dead by the way), you’d see that their business models are very different. Dude. Keep up.

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   2. Siobhan

      I have to agree with Lance.

      Firstly, those user numbers are meaningless. What counts is active users. I’m included in the 400 million figure but have not touched FB for 6+ months. Many of my mates are in the same category.

      Facebook may not be dying yet, but it is maturing. The next step after that is gradual decline into irrelevance. They just need to underestimate the power of the next wave of innovation and they are on the downward slope (e.g. how Microsoft underestimated the impact the web would have). Before FB there was My Space, before that there was Friendster (which led this most recent social networking craze for the first 18 months), before that was six apart etc.

      The same happened in search – remember Alta Vista anyone?

      The lifecycle of an internet company can be incredibly short. FB may still be around in 10 years and may be profitable, but it will not be the craze, and there will be some new fangled site that will be capturing all the headlines. By then most people will interact with the internet using devices other than PCs, and many new disruptive start-ups will adapt more quickly to that change than today’s success stories which will be bureaucratic behemoths by then.

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      1. check out latest Nielson and Hitwise stats. Facebook has the largest percentage of active users – far more than twitter etc and facebook is not just a social network which is what you both seem stuck on. Read Steve Rubels latest posterous post on the subject. They are very aware of being just some ‘new fangled site’ which is whay they’re taking on google. Read the latest: Techcrunch, RWW, Gigaom etc posts on this. Don’t take if from me:)

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         1. To quote Bob Dylan – “he not busy being born is busy dying”. FB is dying – it may not be obvious to all the new comers, but the rot has started. I think that is the main point of Lance’s post. That is not to say that FB can’t reincarnate itself ala Apple etc :)

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         2. That’s a great way to put it Bill. It’s hard to knock such a successful and useful business and product, but Facebook should be concerned that some of their core customers are looking elsewhere.

            They could and no doubt will try to stop the potential rot. They need to make sure Grandma can’t see everything, and that employers will never be able to see what they should not and that the giant bar has private clubs off to the side.

            The growing uncoolness of Facebook for some is directly related to the mainstream nature of the product. AOL, MySpace, Friendster, eBay community, and many others were meant to be too big to fail (as far as investors thought), but fail (or begin to fail) they did.

            Those ‘failed’ sites still retain some communities (and a peculiar type of coolness as a result), which just adds interest to the question: Can a single giant social network dominate for years and years, or is the nature of the game such that they will always come and go?

            And what is next? I struggle with Twitter becoming too mainstream, simply because of the fire-hose effect means that tweet streams get to be unmanageable. Meanwhile there is definite younger interest in the edgy 4chan and newbie chatroulette – places where responsible adults would not dare to go. Could the next dominant social network be the antithesis of the relatively clean Ivy League born Facebook? Will Ning create millions of communities?

            Who knows. All I contend is that there will be a next after Facebook.

            !End

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4. I can’t dream of what the next “venue” will be but I am sure it will take us by surprise.

   I feel as if college student’s are leaving Facebook because they are realizing the detriments that it has to their future careers. There mistakes are being chronicled online and with a Facebook profile it is being directly linked to their person.

   I recently went on to the University of Florida’s campus and asked student’s what their bosses would see on their Facebook. Though debauchery ensued and I got a variety of answers one thing was constant. They all were contemplating deleting a majority of their information from Facebook or their profile entirely.

   I think more and more young people will begin to leave because the choice has become between having your information on Facebook or getting hired for a job.

   –
   Another Day On Facebook

   PS. I have three posts that directly tie into this post right here. One concerning my mother join Facebook, one about how Facebook has gone away from privacy and exclusiveness, and the one where I interviewed University of Florida students.

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5. Unlike Lance and Siobhan, I am a frequent user of Facebook – easy to keep up with overseas friends with minimal effort. While the cool nightclub facet of it may be dying for teenagers and other cool club-goers, those of us who attend Facebook as a private party aren’t going anywhere.

   There’s an item called the ignore button that allows you to keep Granny out of your business with minimal fuss – the equivalent of a bouncer…

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6. Lance I can understand where you are coming from however I am not sure what the future holds – I am sure that I heard that the Wii has been such an amazing success, despite not being the ‘cool’ gamers tool, by focusing on the middle (mainly) America with its range of games and how it interacts with users – ie it appear that you can be relevant, have a high market share and be profitable without necessarily being the coolest toy in the shop or the hippest bar in town.

   However, assuming that you are right, I am interested in the effect on the effective life of internet/technology based companies – the ability to build something new, attract a significant profit producing clientel and then harvest those profits before the next thing/generation comes around.

   Some commentators seem to be even putting Apple in this mix – where in a few years it could be taken over by Android or something similar – but clearly this effective life issue has some significant impact on internet tools, social networking sites, PC based technology etc .

   This has probably always happened but the periods before generation change seem to be happening quicker and quicker (your example of Myspace, friendster, plus Palm PDA, newspaper classifieds – I even heard someone talking about a cloud based tool being old technology and its market being ripe for a new way of doing things).

   To me, one key issue is going to be the valuations placed on businesses by purchasers; this is because a key component of a valuation will be the discounted future cash flows (which are generally assumed to be growing or at least have a long tail in the standard valuation models) – but what happens when the period of future cash flows is limited.

   If in the technological marketplace, the periods between the purchase of a business and when the business’ competitive advantage/source of growing profits becomes seriously under threat, are getting shorter and shorter and the only potential responsive strategies are expensive investment in the next new thing (that potentially cannibalises the existing product’s profits – eg MYOB/Quickbooks/Sage and their attempts at developing subscription based online accounting products – I think even SAP is not immune from these pressures) or an exit price that is at risk of falling quicker than gravity because everyone has moved on to the new thing, then the price that should be paid in the first place must be affected.

   My question is are the business valuers/M&A experts/vendors etc changing their valuation paradigms to fit this changing environment and does this affect the investment decision making in relation to new technologies and tools in the first place (eg News Corp’s investment in MySpace) – as your ability to get a return on your investment is dependent on an effective economic lifecycle that may be getting shorter and shorter.

   Or are we just in a transition phase where the key winners (eg Google (?) etc) and losers are getting sorted out and “transmission” will return to normal as the market eventually does its thing.

   Jason

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7. Don’t underestimate the geek factor in all this, geeks tend to try and be ‘ahead of the curve’, which means they’re likely to be early adopters and also the first to leave social sites in favour of something newer.

   There’s no doubt that with in my geekier group of friends there’s been a shift towards Twitter from Facebook. The ability for tweets to auto-post of Facebook has helped stop it be a completed exodus and made twitter more tempting (why update two sites when you can update one?)

   Which brings me to Buzz. I’d be interested to see what impact Google manages to make in the social networking websphere, if any, and if their integration with other sites in terms of centralizing web content has any impact.

   For geeks at least it’s an interesting play-thing, though perhaps a temporary one.

   P.s. I wonder if the drain of Facebook of ‘university-aged users’ might be a consequence of higher proportion of university-aged geeks? It’d be interesting, though perhaps non-trival, to track the numbers of geeks on the site.

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8. Interesting discussion, as a technical person I like to look at the engineering of the product then watch the trends that emerge out of the user base. In Facebook’s case they are obviously aware of competition and are pulling out all the stops in an attempt to “lock in” their users. They are masters in protecting their own patch and I think this sets them apart from other social networks before them MySpace, Friendster etc.

   Two ways they are achieving this from a product perspective is their applications platform and Facebook connect system. With applications, by opening up the platform they are encouraging 3rd party vendors to fuel their growth and innovation such as Zynga and their Farmville app (which reportedly has more users than WoW and Twitter) being early movers in the app space many developers are now deeply invested in the Facebook platform and similarly users are invested in their apps.

   In terms of Facebook connect, users are now being bound to Facebook without even being on Facebook.com. E.g. you can use popular sites like Digg and TechCrunch and take your Facebook social graph with you to those sites. With Disqus you can now comment on hundreds of websites through your Facebook login. This ups the stakes in switching costs as should they leave, users may still rely on Facebook to access other popular sites they use.

   Both these features of Facebook are designed to maximise their influence across the web and as Siobhan alluded to there’s more to come in the pipeline. Of course user trends, privacy concerns, staleness all play a big part too but those factors alone won’t be enough to topple them. Rather it will take a rival that can outpace and outsmart Facebook’s innovation and influence as well as a value proposition that goes over and beyond the features that Facebook does best.

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9. Actually I agree with Siobhan – it’s not all about the cool kids Lance, and you’re pre-supposing that you actually are one.

   Facebook has been fascinating through the evolution of it’s use – whether it’s full on social stuff or a more tailored ‘friends and family’ experience. I would certainly not be so quick to dismiss it, particularly in the absence of a decent alternative just yet.

   I think people who work with internet and/or social media very quickly assume everyone thinks like them – and that would be so wrong.

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10. “OMG. Mum requested to be friends with one of my friends!” (…I can’t believe I’m hearing this)

    Tweens setting up ironic groups and pages on Facebook referencing the appearance of their parents on the site.

    Marketers targetting ‘Mom’s’ on social networks, knowing it’s a major growth area.

    And the world turns.

    There’s always been teenagers wanting to separate themselves from parental figures… and ‘cool kids’ (aka tastemakers, early adopters, hipsters, et al) seeking to distance themselves from ‘the mainstream’. This behaviour is historical, the obvious difference today is these ‘conversations’ can be being played out in the public arena.

    So what will be the new cool, the latest joint, the place to be?

    Well, for this discussion, I don’t actually think Facebook cares too much at this stage in it’s business. Facebook it would appear, desire the currency of established earners and steady consumers. Mum, reluctant Dad, Aunty Sharon and her new man (25 years her junior and eager). To many of these people, Facebook is the new frontier, much more fun than checking their yahoo email, booking flights, and possibly a health hiatus from their trademe addiction. These are exciting times for an enormous number of people.

    The tween-age ‘cool kids’ have shallow pockets and spend sporadically with little loyalty. However their true value is identity, and the association brands desire. Social start-ups deal in this currency, not Facebook.

    Remember when Facebook didn’t have targeted ads or fanpages? You may not if you’re a baby boomer or even on late blooming Gen X’er, and there’s a reason for that. It wasn’t so long ago.

    Can social media escape advertising? Unlikey if they seek to monetize. When the dad’s, I mean ads, arrive, some ‘cool kids’ vacate. But it makes sense, they’ve been… exhausted.

    Markus

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11. I think it’s a little over-dramatic to predicate the doom of Facebook based on a simple “55% decline in university aged users”.

    The statistic itself isn’t even clear in the context of the article, especially since we should all know how statistics can come to be presented in bits and have their meanings misinterpreted when the full body of data isn’t there for us to see.

    Is it a 55% decline in growth? Is it a 55% decline in university users with a corresponding 55% increase in young adult workers? Personally I find it difficult to believe that the 18-22 demographic would’ve just halved in a year because mathematically, you’d need to include the number of 17 year olds in the demographic which would’ve needed to completely leave Facebook so as to not move into the 18+ demo for the year.

    Sounds like there’s perhaps more behind the quoted statistic in the article?

    In any case, I’m in agreement with Siobahn. You can’t really just say that Facebook is a simple social network for ‘cool people’ anymore. FB is on the warpath to replace algorithmic search (Google) with social search, which is what they believe to be the way of the future and has been one of the key factors driving their walled garden approach against Google (which they’ve only recently began to liberalise, but ever so slowly).

    There are many other aspects and dynamics to the Facebook business model and the competitive tensions it faces.

    I think that from a ‘social network’ perspective, Facebook has a great platform, great functionality and good integration capabilities.

    What I see being Facebook’s bane is not its lifecycle of coolness, but its lifecycle of commercialising the product. The inevitable question and perhaps death sentence for all social networks is at what point does it sell-out its users for more money?

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12. Perhaps not the same piece of research sourced in the article, but here’s one from just over 6 months ago so things can’t be that different:

    http://www.guardian.co.uk/technology/blog/2009/jul/07/facebook-socialnetworking

    http://www.istrategylabs.com/2009/07/2009-facebook-demographics-and-statistics-report-513-growth-in-55-year-old-users-college-high-school-drop-20/

    As expected, aggregate number of users within the age bracket (18-24 in this research) hasn’t fallen, but growth rate has.

    Note also that the analysis doesn’t separate out age-bracket growth by new users and an ageing user base from 18-24 to 25-34, so it’s very likely that the segment of users who turned 25 during the year of the survey would’ve contributed significantly to the 60% growth in the 25-34 bracket.

    Lastly, the fact that all brackets experienced a growth in users means that there isn’t a flight in users just yet. 0-17 is still seeing healthy growth and you could almost expect 18-24’s to be the lowest since by now, they’re more likely to have been indoctrinated by Facebook-ism than the other age groups.

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13. However you label us, those of us that have been on FB more than three years are pretty much “over it”.

    My mum joined early 2010, in fact I signed her up & while I won’t be leaving, I now use FB primarily for social marketing purposes (work) rather than social (play).

    “…more and more young people will begin to leave because the choice has become between having your information on Facebook or getting hired for a job…”

    Integrity.

    While I understand the sentiment, that its either one or the other, I think it fails to recognise that FB has set the standard for a future in which (I predict) networking will increasingly support Gen Y in their search for meaningful work – be it paid and/or unpaid.

    Gazing into my crystal ball I see networking will become more “we” less “me”. The future is one for connecting, sharing & collaborating for greater collective and social purpose.

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    1. I didn’t know people actually read my comment. Haha

       To Renee, I would have to disagree with you if you are saying that FB has set a standard, or a model if you please, on which other social mediums will develop on so that Gen Y will be able to search for meaningful work.

       Facebook started in 2004.

       Monster, now one of the world’s largest employment websites, was created in 1999.

       Facebook is not the standard for networking when it comes to the job arena. It is merely a great utility that facilitates social play, mere connecting with “friends”, and is great for advertisers.

       –
       Another Day On Facebook
       Networking is inherently, by it’s definition and plain reality, “we” and not “me.” That is just what it is… The fact that you feel as if networking is “me” at this point in time makes me question whether people know what networking really is.

       Networking is different from connecting though the latter is involved with the former. Connecting, through social media, is just an exchange of information. This occurs whether you are networking or not.

       Networking is connecting, a sharing of information, plus the continuous creation of an inter”connected” system of things and people. It is the exchange of information and then the utilization of it.

       LinkedIn is a perfect example of this. It not only connects individuals by sharing their professional information but it facilitates the utilization of this information. The future, in my opinion, is already here.

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       1. Let us then agree, to disagree :-)

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          1. That is always nice hahaha

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14. Pingback: Worknow_Aotearoa_NZ» Blog Archive » Social Networking: Integrity

15. http://www.readwriteweb.com/archives/why_is_google_afraid_of_facebook_part_ii_facebooks.php

    “Social network Facebook has passed Yahoo! and is now nearing Google in the #1 spot for most monthly unique visitors from the US, according to traffic analyst firm Compete. Compete just published its January numbers this morning and reported that nearly 134 million US web users visited Facebook last month. Google saw nearly 148 million.”

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16. Keld – another article on RWW today shows the rise of “How do I delete my Facebook account” as a google search term.
    It’s not so much the grandmother effect – as the cumulative effect of Facebook systematically removing privacy. It certainly doesn’t help if your grandmother is able to see everything by default.

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17. To take you analogy one step further Lance, the time must therefore be here for FB to be sold if it’s about to lose it’s “coolest bar in town” status

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    1. 100% agree – MySpace sold at a perfect time, and Facebook would do well to sell at the peak.

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18. It is obvious that siobhan bulfin is one of those suckers that hang out on Facebook and other social networking sites. In other words, the world would be boring if social networking sites just disappeared from the face of the earth today.

    I’ve never used any social networking site because it is time-wasting. If I want to keep in touch with my friends, mates, family members, then I use emails or give them a phone call. I don’t want to be in their face every second by using facebook, twitter, etc, neither do they want me to be in their face every time I announce on Facebook that I just went to a public toilet at Victoria park and there was no toilet paper available. Believe me, some friends of mine who are on social networking sites share such silly stories with their online buddies.

    Social networking sites will no doubt disappear or becoming less important. Users will just move on to something else perhaps because they experienced fatigue in wasting their time on social networking sites.

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19. Quote:
    Social network Facebook has passed Yahoo! and is now nearing Google in the #1 spot for most monthly unique visitors from the US

    That’s a meaningless data. The online world would be unsearchable if web search engines disappear and that’s an undeniable fact. This means that productivity for millions of people around the world would be severely affected. If the opposite occurs, ie, social networking sites all of a sudden disappear from the face of the earth, the suckers will moan & suffer, but nothing else will happen.

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