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The State of Facebook

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Facebook being in the news isn’t necessarily anything surprising.  Every time the social media giant rolls out a new product, feature, or statistic, the world’s news sites make sure you know about it within minutes.  But there have been two recent Facebook related news stories that are a little more intriguing than the usual report of a new design or functionality change.  These reports have more to do with Facebook’s success and future, or perhaps lack there of.

The first piece of news, released by Inside Facebook, was that Facebook’s use is declining in the United States and Canada.  In the month of May, Facebook lost nearly 6 million users in the United States alone.  The drop was significantly less in Canada, with Facebook seeing a user drop of around 1.5 million.  The cause for the user drop is unknown, but it’s more likely than not a mixture of things.  Summer months are typically a slower for social media sites as college students cram for finals and change into their summer routines.  It could also be that Facebook has finally hit its saturation point.  With a total of 150 million users in the United States, nearly half of the entire country’s population is now a Facebook user.  Could this be the end for Facebook’s growth?  Probably not, these numbers are only for two of Facebook’s many countries around the world.  While they are large, important countries that adopted the social network early on, Facebook is incredibly popular all around the world.  The social network’s overall growth is still increasing, with approximately 687 million active users every month.  These numbers could mean a lot of things for Facebook, but we won’t be able to tell exactly what until we see if the decline in the US and Canada continues or levels out.

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With Facebook approaching 700 million users, there are now reports that Facebook is preparing itself for an IPO that could easily top $100 billion.  Yes, you read that right, $100 BILLION.  This would make Facebook’s IPO one of the largest in history.  Much larger than LinkedIn’s recent IPO of $4.3 billion, and quadruple Google’s 2004 IPO of $23 billion.  CNBC reports that the first quarter of 2012 is the likely time for Facebook to go public.  This timing seems very possible, as Facebook will be mandated to report their quarterly financial statements beginning in April 2012.  This will be required of them due to a 1934 Securities and Exchange Act that requires companies with more than 500 investors to publicly release their financial information.  Facebook expects to have more than 500 investors sometime this year, so an IPO early next year would make sense.

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With a valuable future and decline of users, Facebook’s fate is hard to tell.  Some people believe Facebook will someday go the way of MySpace, while others think Facebook is different and will remain a constant part of our lives.  Only time will tell what truly happens, but these are definitely some interesting figures to think about.  Tell us what you think Facebook’s future looks like in the comments below.  Is a drop in users the beginning of the end, or just a bump in the road to a successful IPO?

  • http://www.freechurchwebsites.org/ Peter Egan Jr.

    My suspicion as to the reason for Facebook’s decline in users in the US, Canada and the UK is that it has something to do with the monthly news headlines excoriating Facebook for failing to protect user privacy.

    While I understand why users might be turned off by this, it does seem to me that there is a huge double-standard regarding Facebook and everyone else when it comes to privacy.

    Sure, stuff posted on Facebook may be seen by people whom the person doing the posting does not wish to share their information with. That said, the same is true for seemingly every other website and community on the web. Yet for some reason, Facebook is the only site whose users seem to have a widespread expectation of privacy.

    My opinion is that if you don’t want the public to see a particular photo or read a particular comment, don’t post it online.

  • Chase

    2012?…

    In all seriousness, this is interesting news; in fact, I haven’t heard this until now.

    As long as Facebook remembers its about the user and not about profit/valuation/market cap they shouldn’t go the way of the dodo bird. Everything else will fall in place with privacy concerns, advertising, etc.

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  • http://alien-ufo-sightings.com Bill Bob

    I never saw the true appeal of Facebook as it’s just a marketing tool scraping user info so it can sell your details in the backend. It’s free for a reason, folks. What suprises me is the fact that with all those users they’ve not thought to turn it into a shopping centre with streaming movies and music on demand. Social sites seem ro miss the real potential they hold and fall back in the pay per click model that google did so well from. Services over adds would make more sense.

  • Cat

    I left facebook a month ago and was on it since September of 2005. I’m from Canada. I left because I no longer felt safe, and the time it took from my life is ridiculous. I am much more productive in my studying, social life and family life. (Seems strange considering it’s a social networking site) I was upset that there was a new timeline release that has every single action of yours since you joined. I personally did not have the time to spend to go through 6.5 years of posts and comments from my first year of university.

    I personally liked the site best when it was simple. Photos you want to post. A wall and a little about yourself. The ads, games, and other is a pain and a waste of time. I also joined when it was just limited to university students, which I think should be the same now. It’s no longer fun, just plain creepy.

    unfortunately my friends think I am strange for not having a facebook as it really has become your identity on the internet. Most sites require you to login into facebook to post or gain access to the website… forcing those who don’t want an account to have one.

  • http://davidhouk.com Dave Houk

    I would have never thought that there would be a decline in U.S. users – probably because all of those CNN tv specials about Facebooks privacy, I still like being apart of Facebook and see no problem with how they operate. If you are someone that wants privacy then stay off the internet and stay off Face – problem solved.

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