On February 4, 2004 at Harvard, Mark Zuckerberg officially launched a site called “TheFacebook”. The project started the previous October under the name of Facemash would – precisely – change the face of the world. This Friday, Facebook blows out 18 candles and therefore officially reaches maturity, but in a much more turbulent climate than expected.
Because nothing is going well at Facebook. At the end of the day on Wednesday, the company presented disastrous quarterly results. For the first time in its history, the social network has lost users. And not just a little: half a million fewer Internet users visit the site every day, especially in Africa and Latin America. Overall, the growth of its user base is stagnating…
Meanwhile, governments around the world are currently investigating its extremely dominant position in the digital social platform market and are dreaming of splitting up the company, which was renamed Meta six months ago.
His news feed also needs to be reinvented. It is shared as never before between the very unpredictable publications of its 1.9 billion daily users, the sometimes very dubious content of many militant groups from all walks of life, the growing presence of merchants and individuals who sell goods and services, new or used.
There is also advertising.
Even Mark Zuckerberg agrees: his News Feed is less appealing than it once was. Outdated, Facebook? Shaken, to say the least. “Everything revolves around the interest [“engagement”, en anglais] users”, explains Nadia Seraiocco, doctoral student and lecturer at the School of Media at the University of Quebec in Montreal. “Anything that reacts strongly attracts people, who click and share. This creates more advertising opportunities. But it was necessary to better regulate this commitment to limit misinformation and the spread of hateful content. Apple has added to this by cutting short some of its most controversial advertising targeting techniques.
The younger ones didn’t see anything happen. Most continue to shun their parents’ favorite platform. “We have the impression these days that Facebook is an old site,” admits Mme Seraiocco, observing that it still came into existence at a time when its rivals were called Myspace, Friendster and Yahoo…
A world without Facebook?
As “Zuck” admitted on Wednesday, the youngest Internet users prefer – by far – the digital equivalent of junk food: short videos that are zany, playful and without much nutritional value from a strictly intellectual point of view. In a word: TikTok. The social network from China saw its share of visitors jump by 45% between the summer of 2020 and the fall of 2021 to surpass the symbolic bar of one billion. Half of them are under 30 years old. The third was not born when Facebook was born.
Seducing customers who have never lived in a world without Facebook will certainly be the next challenge for the Californian social network, believes analyst and portfolio manager Aaron Lanni of Medici. The Saint-Bruno-de-Montarville firm follows Meta’s activities closely and holds some of its shares in its portfolio.
“Facebook needs to adapt to new forms of content that revolve around video,” he says. Facebook was initially a platform for exchanging written messages, then it added the photo by acquiring Instagram, continues the analyst. But TikTok is sort of the archetypal video-based social network, something Facebook is struggling to become.
Patience, says Aaron Lanni. “Facebook has become accustomed to buying or copying the best. There, its leaders will copy TikTok. They created the “reels” [de courtes séquences vidéo], we will have to find the best content creators to produce more of it. But catching up with TikTok is likely to be very difficult. The CEO of Meta has confirmed that he will invest heavily to put his “reels” at the forefront of his platform as soon as possible.
One thing is sure, Facebook has the financial means for its ambitions: the company pocketed US$112 billion during its 2021 fiscal year, or 41% more than during the previous twelve months. All is not black. “There are 100 million companies on its platform and only 10% of them buy advertising there. As long as you don’t get too distracted by virtual reality, Facebook still has a lot of business potential,” says Aaron Lanni.
Squaring the circle will therefore be for Zuckerberg and his gang to extend the growth of advertising revenue from their social network without exasperating users who do not always like everything they see on their newsfeed.
The great transformation
At 18, Facebook is coming to a new crossroads. We can already see certain avenues being studied more closely: the website and mobile site focusing entirely on targeted advertising also wants to become a transactional platform.
A new great transformation is underway. The mobile shift made in 2012 to take advantage of the emergence of smart telephony was colossal. At the time, Facebook was just landing on the stock market and its value was nine times less than it is now, at US$700 billion. Today, Facebook, or at least Meta, is diversifying. “Look at its more recent acquisitions to see where the company will be in a few years,” suggests Nadia Seraiocco.
There is of course virtual reality on the horizon, but that’s not all. With revenues of US$877 million in the last quarter, the division formerly called Oculus will not become the locomotive of the group anytime soon.
On the other hand, with its Marketplace, the company is experiencing a success in e-commerce that had so far eluded it. Its revenues of US$26 billion last year in this sector represent an annual increase of 48%. Messenger and WhatsApp have proven to be excellent customer service tools for e-tailers. This is a huge advantage for Facebook over Amazon or even Shopify, the two e-commerce heavyweights.
Facebook is also increasingly interested in the back room of the modern web: what if your Facebook account became proof of identification to access other sites and applications? What is known in the jargon as a single sign-on solution (or SSO in English, for “single sign-on”) would be an excellent way for Facebook to track Internet users without upsetting Apple and Google, which have restricted the scope of targeting Facebook ad on iPhone and Android phones. Apple and Google also offer their respective single sign-on solution.
Viral video, advertising, online sales… Without neglecting the issue of respect for the privacy of Internet users. While trying to appease the authorities who are getting fed up with seemingly out of control tech giants, Facebook is not short of challenges. But from there to predict his end… “It’s been 10 years since we announced his death, but Facebook will still be there in 10 years,” says Nadia Seraiocco.