Will Facebook Ever Hit 2 Billion Users?

I just read Jason Hesse’s recent article on the falling stock price of Facebook. It makes some good points and generally I agree with it’s conclusions around the execution of the IPO and possibly today’s valuation. The multiples on revenue were after all, many times that of Google at IPO, for example.

Some of the other conclusions around future growth, I feel hold less water. Jason states:

“More than 900 million people is enormous, but could the company realistically double its monthly users? Anecdotal evidence would suggest not. ” …. “Naturally, the company’s growth could come from new sign ups. Facebook’s largest market is Europe, with more than 230 million users. This means more than one in four people in Europe are signed up to and use the social network. So realistically, there is little scope for this to grow significantly – if you’re not on Facebook already, the chances are you just don’t care and won’t join anytime soon.”

I don’t think I agree with this statement. Why won’t people care any time soon? I consider Facebook and social networking as a part of our lives, to be similar to the take up of email and other new technology, like the web itself. Even my Dad has a profile now, although admittedly for a 75 year old he is pretty well connected with PC’s, tablets and Android phones!

I also can’t help feel the sentiment of this statement is similar to the naysayers of the web 10 yrs ago; I would conclude social networking is following a very similar growth path.

With 1.5+ billion people on the regular internet but with 5 billion mobile subscribers, who are all fast moving to Smartphones with internet, the numbers also don’t support this statement.

And why would more than 1 in 4 people in Europe not want to join Facebook?

It’s taken just two years for Facebook to nearly double it’s user base.

The real issue IMHO is not that Facebook will stop growing because people don’t want to be on a social network and embrace the sweeping social change which those services is causing, but whether Facebook can maintain and evolve a service which captures that growth.

Given that a lot of the growth will be users who access the service by mobile, this is the second issue which faces Facebook (no pun intended). Can a service routed online historically successfully transform it self to become the stalwart of the mobile world?

In summary then the -in my view inevitable- growth of users numbers in Facebook is theirs to screw. They must:

1) Continue to innovate their product and maintain existing users attention
2) Navigate the cultural preferences of the untapped developing markets
3) Become a truly mobile orientated company, with the same level of UI/Ux on mobile as they demonstrate online.

Arguably they are currently failing at no.3

Finally, there is the spectre of “Privacy”. Jason says:

“If anything, as privacy concerns continue to grow, more people will leave the social network.”

I think this is also unlikely UNLESS Facebook makes a very serious faux pas. Radical transparency is not for everyone but there is good evidence to suggest the trend is in that direction. I can’t help feel this argument, that social networking has a limited growth due to privacy fears, is akin to the talk about e-commerce never taking off online for the mass market because of fears of credit cards not being secure online. In other words, it’s a red herring.

Compuserve was my first ever email address back in the mid to late 1990′s. It then slowly died over a period of years, as destination closed wall portals were trumped by the world wide web. Facebook, if it doesn’t continue to aggressively become more open, may risk it’s position as the ultimate social graph and silo of social data. (BTW, that little button in the top bar,  a globe with two striped lines, took you out onto the ‘scary’ WWW)

Facebook must get it’s future strategy right and that strategy must be around becoming more a platform and less a destination site, if it wants to maintain it’s position as the biggest silo of social data on the web. If it doesn’t do this fast enough, it will likely go the way of AOL and Compuserve before it, or be out manoeuvred by a future more open and yet to exist mobile competitor.

Old Europe to open new can of Internet worms at eG8 Summit

My Monday started well as I woke to discover that I’m “an Internet titan“, that is if you believe the Reuters pre-coverage of the eG8 event in Paris tomorrow.

Nicolas Sarkozy, the French President, describes the event on the official eG8 website thus:

“The Internet’s multilateral dynamic, and the driving role that the private sector and civil society play in its development, have led me to invite the major stake- holders of this ecosystem to Paris, so that the meeting of Heads of State can benefit from their vision. The content of your exchanges will be conveyed to the Heads of State and governments of the G8. A new phenomenon requires a new method of consultation, one that recognizes the legitimacy and the responsibility of the actors concerned: hence the idea of this e-G8 Forum.” read more

I’m actually very excited to see how the event will be run and President Sarkozy should at least be given credit for pushing not only onto the G8 agenda, but for organising a consultation prior. The question is, what will transpire?

Previously the President has said:

“Regulating the Internet to correct its excesses and abuses that come about in the total absence of rules — this is a moral imperative!”

..said during a speech at the Vatican in 2010.

Big names speakers (who certainly do deserve the internet titan moniker) include Mark Z, Rupert Murdoch, Jeff Bezos and Eric Schdmit alongside a bunch of smart attendees such as open data proponents like @novaspivack (his blog post on eg8 here)

As the blurb says, the aim is to build a consensus for the key issues are which should be discussed by the G8. The topics likely to dominate the agenda include copyright law, privacy and personal data.

Sarkozy has a poor record (depending on your point of view) in these areas, championing stricter controls. Everyone else (at least from the corporate world) is predictably pushing their own agenda – not based on what is best for the consumer but what furthers their own gain.

Traditional media are pushing for stricter controls – IP blocking, the confiscating of domain names, the right of government to “pull down” websites. These backward steps are a grave mistake.

Even if you agree that (e.g.) piracy sites or copy right infringers should have their websites curtailed, enabling a government (or any entity) to do so at will risks a slippery slope toward at best ever increasing controls and at worse outright censorship.

In fact the UK government has already enacted some of these laws and more of this ilk are on the horizon, such as the recent EU cookies law (there’s a great example here of what visiting a website adhering to the potential new guidelines might be like for you the user) it’s a nightmare in the making. @mikebutcher from Techcrunch Europe seemed very clean on his opinion on the cookie monster.

I concede the definition of “Fair use” as a concept against copyright theft or republication of content presents a raft of problems in itself for those wanting to (quite rightly) be paid for their work; but the very nature of influence and ambassador based endorsement of brands, content and companies via sharing on social media sites means this redistribution of digital content is inevitable.

The charming Tuileries Gardens in the centre of Paris where the eG8 is being held

Other measures recently introduced such as Sarkozy’s “3 strikes and you’re out policy” which cuts off the right to have internet access for repeat copyright offenders, just seem Dickensian. There are also bigger issues. Internet access is fast pervading every aspect of daily life. Not having access genuinely at best would already be inconvenient, at worst very seriously debilitating. “Then don’t break copyright laws” you may cry.

The young giants on the digital age such as Google and Facebook are pushing of course for less or no regulation; arguing everything from freedom of speech to a fundamental shift in the meaning of privacy and the way people share, want to share or should share (Mark is a particularly keen advocate of the latter for very obvious reasons).

I err on the side of these new corporate giants more so than those clinging to an ever more inaccurate perception of the online world. Their hopes of maintaining the status quo are just that: hope, as the reality on the web is already very different.

Ironically, I’m looking forward to meeting some European digital pioneers who I don’t know and many who are attending from the USA who I do.

Hopefully I can add something useful to the debate along the way too. If you have an opinion, please add it to the comments, I’d love to hear from you.

Finally, being in France I suppose the dress code will be predictably formal. I can either wear a suit and blend in, or buck the trend and hang out in my more usual jeans and shirt, the standard internet-entrepreneurial garb.

The one time I need a crowd-source “what to wear” app and there isn’t one.

See you in Paris.