Why Facebook is a dead man walking part II?

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In January 2008, I wrote a post expressing my concerns about Facebook as a long-term high-growth business. Given the recent changes at Facebook it made sense to revisit my views and see how they stood up in the current light.

Why Facebook is a dead man walking part II

On the face of it my concerns about Facebook seem to be unfounded. Many of my concerns don’t seem to be supported by Facebook’s numbers:

  • Facebook’s user experience
  • Negative network effects
  • Finances
  • Developer relations

The site has grown to over 400 million users, if it was a world region it would be roughly equivalent 80 per cent of the population of the European Union. This audience can take advantage of some 550,000 applications. It has an audience that is so engaged over 300,000 help translate the site into different languages, allowing it expand its global audience. You can interact with Facebook in Irish and Leet Speak; I am sure that Klingon and Na’vi will be on the way.

Privacy concerns have sprung up again, but many experts think that they maybe overblown with Facebook’s success bringing on the customary tall poppy syndrome response.

A good measure of the audience dissatisfaction with Facebook about compromised privacy can be derived from the fact that the top search which comes up when you start typing ‘how do I’ in Google is ‘how do I delete my facebook account’.

How do I

Given my job, I need to keep a toe in the Facebook eco-system just so I know what I am talking about, but I have locked my profile down do tightly that it is pretty much useless as a ‘social’ service. I am not the only one.

This collective cleansing of Facebook user data by consumers, affects the amount of utility that Facebook’s audience can gain from the site; this is likely to impact on future user engagement and the ability to attract both brand interactions and advertisers.

Facebook’s response to policy makers hasn’t engendered consumer trust. These changes also have to be seen in the context of other cock-ups like Beacon a few years ago. I get the sense that the zeitgeist may have changed, Facebook may have started to fall out of favour.

Part of the problem with the privacy settings is their obstification by design which could have been precisely created to be a willfully bad user experience. Negative network effects are at work making it harder to wade through the mass of content on Facebook to find the group or fan page that you may want. It is telling that I have been recently using Google rather than Facebook’s own search to locate groups and fan pages of interest.

Google has effectively become the de facto gate-keeper again. What does this mean for the Microsoft | Facebook partnership in the future?

With many of its recent rules changes Facebook hasn’t been doing itself any favours. Recent catch-ups with industry peers have revolved into support sessions on how to circumvent new Facebook regulations on application development and promotion or brand engagement campaigns. The apt ‘zucked‘ description for a person or entity adversely affected by Facebook’s rule changes reminds people of a dominant Microsoft right on the cusp of the anti-trust trials that marked its high point.

I stand by the hypothesis of my original article two years ago, it feels that the negative point of inflection for Facebook is now coming ever nearer: Facebook is a dead man walking.