Princeton Researchers: Facebook 'Epidemic' Headed For Collapse

Thursday, 23 Jan 2014 09:15 PM

By John Morgan

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Facebook might collapse by 2017 because of a range of factors that will decimate its audience, including one that is statistically similar to the progress of an infectious disease, according to research cited by InvestorPlace.

InvestorPlace noted that a Princeton University research paper, entitled “Epidemiological Modeling of Online Social Network Dynamics,” concludes Facebook could lose 80 percent of its users between 2015 and 2017.

The Princeton researchers used the study of disease to extrapolate the lifespan of social networks. The paper said that adoption of social networks is “analogous to infection,” and abandonment of social networks “is analogous to recovery” from a disease.

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As a case study, they relied on the experience of MySpace as a social network whose use spread rapidly, like an epidemic, and then quickly died out when the number of new users declined. MySpace had a suddenly huge following in 2005, but had faded into obscurity by 2011, when News Corp. sold it at a loss of hundreds of millions of dollars.

According to InvestorPlace, Facebook may be at the threshold of the abandonment for multiple reasons.

The first is age. At 10 years old, Facebook may be growing long in the tooth, since new and fresh is what counts in the digital universe.

“The age problem has hit companies like Yahoo and AOL. Despite many efforts to turn things around, they’ve had a hard time getting more traction. Facebook stock might just be the next in line,” InvestorPlace said.

A second factor is that Facebook may have maxed out the advertising growth on its site. InvestorPlace displayed a Facebook screenshot of seven separate ads on a single page. Some
observers claim MySpace started to go into decline when it became too top-heavy with ads, annoying users.

There is also evidence that fickle teenagers are losing interest and starting to migrate elsewhere to newer social sites like SnapChat, and that Facebook has strayed from the path of innovation, InvestorPlace concluded.

“For the most part, Facebook stock has suffered from a creative dry spell. No doubt, this could be a huge problem, especially as the pace of innovation from its competition has not let up in any way.”

24/7 Wall St. reported Facebook’s management revealed in a blog post that the company is planning to extend the reach of its ad sales by displaying Facebook ads in third-party mobile apps.

The apparent rationale may be that if Facebook has maxed out the number of ad placements on its own user pages, then the company will simply take them elsewhere and still grow revenues.

“Facebook is not only solving a problem for tens of thousands of developers who create free
apps and face trouble making money on them,” 24/7 Wall St. said. “The move is another way for Facebook to accelerate its own ad growth, which is essential to maintain its mammoth $142 billion valuation.”

Editor’s Note: Free Video — ‘Rogue Calendar’ Could Turn 490% Profits

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