It’s been said before that social networks have the lifespan of a pet hamster: they last a few years, maybe five at best, before something newer, cooler, and technologically more advanced comes along. But with Facebook founded in 2004 and now well into its second decade of life, that doesn’t seem to be the case, leading many to wonder the very valid question: will Facebook ever fail?
With Almost 2 Billion Users, Will Facebook’s Growth Ever Stop?
According to the company’s most recent quarterly earnings report released in early February, Facebook now has 1.86 billion monthly active users, with 1.23 billion of those checking the service every day. That figure is a 17 percent increase over last year. In addition, its revenue grew to $8.63 billion, beating Wall Street estimates of $8.31 billion. This good news even came in spite of the fact that Facebook was forced to pay $500 million after a grand jury settlement ruled in its case related to the acquisition of Oculus Rift.
But even with these numbers, some say unstoppable growth of any kind is simply too good to be true. According to Forbes, Wall Street wants Facebook to show revenue growth outside its news feed”, or to diversify the ways that it can potentially make money, thereby increasing its chances of longevity. However, Forbes went on to say that there are still many compelling reasons for investors to bet on Facebook and count on its ongoing growth, notably that the company is “pursuing in parallel many of the five dimensions of growth: new or existing customers, geographies, products, capabilities, and/or culture.”
How Does Facebook Fuel Its Growth?
So what steps are Facebook taking to fuel its unrivalled growth? And, more importantly, are they likely to persist in the future, allowing the company to grow further? The first is that the company has proved persistent and successful at acquiring companies which, if not already popular, prove to become so further down the line. These include Instagram and WhatsApp.
Notably, though, Facebook has allowed the likes of Instagram to operate as its own company within the larger Facebook infrastructure. Keeping it as a distinct service—rather than folding it into Facebook—has allowed it to gain users on its own, which is both shrewd from a financial and usership perspective. If Facebook can continue to make prudent acquisitions like this that serve as starting points for growth, it bodes well for its future.
Facebook’s Global Picture
As a general rule, the more markets that Facebook enters, the more valuable it becomes in a sense. If a social platform’s main value proposition to its users is its network, no one can even come close to rivalling Facebook on a global scale. By entering developing markets before local imitators were able to take hold, Facebook made its global footprint early. And now, as it ably adapts to so-called “mega-trends” like video and mobile, it only serves to embed itself more into people’s daily lives and to their networks. Once it is ingrained in users’ lives—and all the friends and family of those users all over the world—it will be difficult to unseat, as a competitor arguably has to convert a user and their entire network all at once.
More Data, Bigger Value
The third way that Facebook is feeding into seemingly endless growth is by offering the best value proposition to its marketers. The more data it has, the better marketers can reach their demographics with stunning accuracy. This is somewhat of a self-fulfilling prophecy, as more users mean more data means more ability to woo advertisers. As long as Facebook doesn’t overstep the bounds in annoying users with too many ads—and thereby scaring them away—this revenue source will likely continue to flourish and be something that advertisers are willing to pay more and more for the better it gets.