Monday Note

You hear things about Facebook. You see things. As its audience matures, a subtle shift might be underway. Of course, numbers remains staggering. Facebook is heading toward the 800 million users mark, mostly by conquering new markets. The growth is distributed as follows : Middle-East Africa, Asia-Pacific and Latin America grow by around 60% per year; Europe by 35-40%; and North America by 25%. And demographics are shifting: older people are joining in Western markets while a younger audience grows in emerging ones. More changes are underway as the internet spreads on both landlines and mobile devices: over the last 3 years, China added more internet users than exist in the United States today. Furthermore, in the fastest growing markets, Facebook captures over 90% of all social network traffic. So, for the near future, Facebook doesn’t have a growth problem.

On mature markets, the future looks bright as well. In the United States, unique users grew by 22% between June 2010 and September 2011, reaching a total of155 million. Notably, the average time spent per person grew from 6:02hrs to 7:42hrs.

And…

When you speak with grownups and young adults who used to be Facebook enthusiasts, you hear the following :
– Facebook’s interface, its features have become overly complicated. The result is it takes more time to do the same old things.
– Managing friends leaves you with two choices: spending a lot of time delicately pruning lists, circles and groups, or being swamped.
– Constant and insidious changes in Facebook’s privacy features keep taking people off-guard: all of a sudden, you find many things about your digital life, mostly mundane stuff such as what you read and listen, being broadly available outside your initial circle. Quasi-paranoid caution has become a must. And again, since “opening” is the default setting on Facebook, recovering your own privacy gets increasingly complicated.
– A rise in the advertising presence, which reinforces the impression of being tracked down: users don’t have the slightest idea of the breadth and depth of Facebook’s mining of their personal activities.

It now seems Facebook’s usage is undergoing a split. Active Facebookers become increasingly engaged, spend more time doing more stuff, while “reasonable” users (above 25) become more reluctant and careful.

Who benefits from such shift? Twitter, primarily. Globally, Twitter’s microblogging/social network is much smaller than Facebook, with a reported 200 million users, only a fraction of which are really active. Business-wise, Facebook is 30 times larger than Twitter and is expected to gross $4.27bn this year, according to eMarketer ultra-precise estimates; that’s more than twice last year’s revenue. As for Twitter, its advertising strategy is gaining traction: again, eMarketer expects Twitter to make $139.5 million, up 210% from the previous year.

Given the differences in size and reach, does it make sense to compare the two?

Let’s consider the news media sector. From a pure quantitative standpoint, Facebook remains a solid referral for news sites as people “Like” and link to stories. But Facebook encourages fly-bys, i.e. viewers that  won’t stay on the site. Twitter’s referrals to a news content is of a different nature. Tweets and retweeets usually come from people who have chosen to follow a given individual, a news organization or a specific subject. The referral is therefore much sharper, more targeted than the impulsive “throw-on-my-Facebook-wall” type.

For what it worth, let’s look at an essay published last Saturday in the Wall Street Journal. Titled Why Can’t Wall Street Handle the Truth, it is written by Mike Mayo, a long time banking analyst who made repeated calls to dump banks stocks.

The essay generated 795 Facebook “Likes” — which is small for a story that is freely available in the WSJ Social Facebook application:

In the meantime, the same piece (and the mention of Mayo’s book) has been indexed 140,000 times in Google, thanks to only 392 tweets.

Still using the Wall Street Journal as an example, let’s have look at Walt Mossberg’s presence. (He is the Journal’s world-famous tech writer.) On Facebook, his page got 874 “Likes”. On the WSJ Social application, where Mossberg appears as an editor, he got 252 readers as the app has been able to collect a total “23K Readers”

Not very compelling.

But, on Twitter, Walt has 264,000 followers.

Another key element in Twitter’s favor: the mobile factor. Twitter’s 140 characters format turned out to be a killer on smartphones: it is growing faster on mobile (+75% Year-to-Year) than LinkedIn (+69%) and Facebook  (+50%). That’s the privilege of simplicity and straightforwardness over feature-itis.

—frederic.filloux@mondaynote.com

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