Is Facebook Near Its End?

Being a part of the GenY generation, we have seen the beginning and explosion of social media, especially Facebook, but with more users than the population of China, would Facebook implode? Here we try to present both sides of the coin.

1)      Corporate Governance – Facebook struggles with a light approach towards corporate governance. Facebook being an international company needs to follow the norms. Also, many employees have complained about the CEO’s interference (Read more about the Instagram founders leaving Facebook here). Sheryl Sandberg the COO is also under fire for her approach and attitude, here’s the full story.

2)      Lack of Diversification – From a business strategy standpoint, Facebook has only one core business, i.e. making money via advertising. Yes, they have succeeded and are still succeeding in making their billions, but this is an inherent risk they are suffering from, if we look at Google and Amazon, they have other businesses as well. Acquisitions like Instagram and WhatsApp help, but new business verticals still need to be created.

3)      Data Misuse – In the infamous Cambridge Analytica fiasco that happened, Mark Zuckerberg was forced to issue apologies in leading newspapers across the world (point to be kept in mind, that India despite having one of the highest users on his platform, got no apology, so clearly users belonging to different demographics are treated very differently even outside the system). Again, it is a mixture of loose policies and a lax corporate governance structure that allowed such a thing to happen.

4)      Fake News – This is the biggest culprit of them all having the maximum impact. Facebook and its products help in making things go viral, including incorrect information. Spreading hatred has always been easier than spreading peace. Whether a lynch mob in India killing someone via a fake WhatsApp message or the mass genocide in Myanmar of the Rohingyaas, events like these were brought about by fake posts on Facebook.

Point to note in the above news article is the quality of the tips that one of the biggest tech companies gives to its users –

“The tips included checking information with other sources, looking at photos carefully because they could be edited in a misleading way and thinking twice before sharing a message if you are not sure it is true.”

I think Facebook forgot a simple rule of product development here, understand your users – more on this later.

5)      More Generic and cluttered – Let’s face it, does Facebook still excite you? There was a time when everyone was posting and you were happy to e-meet your friend from nursery school with whom you had lost touch years ago. Now Facebook is simply all about advertising, page likes and promotions. With modern user experience demanding a leaner and cleaner approach, Facebook just bombards you with everything.

Here we have shared the reasons why Facebook is losing its sheen; now try to look at why we think Facebook is here to stay.

1)      The Brand in itself – Everyone knows about it! (well almost), you use it, your kids use it, your parents use it and in some cases your grandparents use it. Along with that, the movie “The Social Network”, helped in cementing the brand in our heads. People are interested in knowing about others’ lives and try to show how good their lives are. This is very intrinsic human behavior and something Facebook leverages to the T. We can curse Facebook for sure, but life without it would be difficult since we are used to it now.

is facebook near it end

2)      There is no competition – At least as of now, there is no direct competitor. China has its own versions of social networks but they do not have the diversification and reach of Facebook.

3)     There is a huge set of users left to acquire and monetize from – Countries like India have caught onto the digital movement only as of late, and rural India has only started using smartphones recently. Read more here.  Facebook will mostly spread its tentacles across the length and breadth of the developing world.

4)      More acquisitions  A cash-rich company has no problems in acquiring companies which help expand business (or killing the competition). Part of acquisition is talent as well. They have the smartest developers and data scientists working for them.

5)      Big companies with a lot of data will get bigger – Data is the new oil and the more data you have the more you will succeed. Also, it is usually the big that get bigger – these Wiki articles on Matthew Effect & Preferential attachment will help you understand my point. Read more.

6)      Many businesses depend on it – Facebook has helped trigger a new generation of entrepreneurs. From small businesses to large, everyone has the same field (not leveled though, as your ad budgets help decide your reach). A lot of businesses depend on their Facebook pages for their branding and sales, while digital marketing agencies thrive on it.


Food for thought –  A close friend of mine runs a digital detox camp and promotes it on Facebook