Wednesday, January 22, 2014

"Facebook to lose 80% of its users by 2017, according to a new study" (FB)

The stock is down 81 cents at $57.70.
From Yahoo Finance:
The Facebook generation may be about to come to an end if Princeton University researchers are correct. A new study predicts “a rapid decline in Facebook activity in the next few years.” The study, conducted by two researchers in Princeton’s Department of Mechanical and Aerospace Engineering, applies the same model used in the study of disease to extrapolate future adoption and abandonment of social networks.

In the case of Facebook (FB), the researchers used MySpace as a case study for a social network whose use spread rapidly, like a disease, and then quickly died out when the number of new users declined. The study finds that Facebook is “just beginning to show the onset of an abandonment phase.” The researchers believe that abandonment will accelerate to the point that Facebook could lose 80% of its users between 2015 and 2017. 

The report also highlights the high valuations placed on social networking companies such as Facebook and Twitter (TWTR), $140 billion and $35 billion, respectively as of the report’s publishing last week.  ...MORE
Here's an opposing view: