On Thursday, Facebook reported earnings for the first time since its initial public offering in May -- $1.18 billion in revenue, up 32% from last year.
Claiming 955 million monthly active users, more than half of whom log in every day, Facebook has a lot to crow about. But, with its disappointing performance out of the IPO gate, it still has a lot to prove financially. It also has a lot to prove to its users, who show signs of what many are calling Facebook fatigue. There's no doubt that, despite its missteps, Facebook will remain a social network juggernaut that will touch and affect pretty much everything and everyone, but its competitors are increasingly drawing new users and increased participation.
According to the American Customer Satisfaction Index (ACSI) E-Business Report, released on July 17, Facebook has seen the biggest drop in customer satisfaction among e-businesses, dropping 8%, to 61 on a 100-point scale. Google+, meanwhile, scored a 78. The report notes that user satisfaction with Google+ may be attributed to a lack of traditional advertising and a strong mobile solution, two things that Facebook has long been dinged for not having.
Facebook users have also shown dissatisfaction with changes to the Facebook interface--most notably, the new Timeline--as well as with privacy issues. Recently, Facebook got users in an uproar when it made Facebook email the default in in user profiles.
The ACSI report notes that, as a category, social media is down 1.4% to 69. The study broadening the number of companies it measured this year to include for the first time Google+, Pinterest (which scored a 69 on ACSI's scale), (which scored 63) and Twitter.com (scoring 64).
In a May 2012 New Yorker column, Steve Coll put forth what he believes is Facebook's big dilemma:
"[Facebook CEO Mark] Zuckerberg's business model requires the trust and loyalty of his users so that he can make money from their participation, yet he must simultaneously stretch that trust by driving the site to maximize profits, including by selling users' personal information. The IPO...will exacerbate this tension: Facebook's huge valuation now puts pressure on the company's strategists to increase its revenue-per-user. That means more ads, more data mining, and more creative thinking about new ways to commercialize the personal, cultural, political, and even revolutionary activity of users."
It was all too much for Coll, who, after some searching, found and used the "deactivate" button on Facebook.
There's no hard evidence that users are leaving Facebook in droves, or even in dribs and drabs (if not by deactivating their accounts but through no or little activity on the site). But it's clear that Facebook is at a crossroads, and it's also clear that its competition is not standing still in the meantime.
In this slideshow, The BrainYard looks at the public social networks that are ready, willing and--for the most part--able to fill in some of Facebook's notable gaps.
NASDAQ opening bell photo by Zef Nikolla, courtesy of Facebook
Google's social network, Google+, had 170 million users as of May of this year, according to Go-Gulf.com. One of the Google+'s early differentiators was its Circles capability, where users could group contacts in categories, thereby logically separating their business and personal interactions. Facebook has increased its ability in this area, but, as with many things Facebook, it can be complicated to do so. Google's Hangouts feature has also been a big draw, as has the clean (i.e., uncluttered by ads) interface and integration with Google's overall platform.
LinkedIn, with its 150 million users, has always been known as the social network for professionals. Its no-nonsense interface and focused raison d'etre keep users engaged and satisfied. Its recent interface update was more spit and polish than major change, which seemed to suit its users just fine.
Like LinkedIn, Pinterest is a much more focused social network than Facebook. Pinterest, with 11 million users and growing, is essentially an online bulletin board, where users can post images of things they like, projects they've completed, and,--notably--things they want. Facebook is reportedly testing a Want button, which would provide advertisers with a treasure trove of data and seems to be a direct answer to Pinterest's increasing popularity.
Microsoft's So.cl is no more than a blip on the social networking radar at this point, but, with the recent announcement of increased social capabilities in Office, not to mention the potential for some kind of internal/external social that integration with SharePoint, it's worth watching. So.cl--which combines elements of social networking, search and video sharing--was initially introduced on college campuses, but is now open to anyone who wants to give it a try.
- Debra Donston-Miller
- Connect Directly
5 Facebook Rivals Hot On Its Heels
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