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| This Tuesday, July 16, 2013, photo, shows a sign seen at Facebook headquarters in Menlo Park, Calif. Facebook reports quarterly earnings on Wednesday, July 24, 2013. |
Facebook (FB)
has lost more than 3 million U.S. teenagers in the past three years,
according to a new study, adding to fears the social networking site has
become uncool with the younger set.
The study, by market researcher iStrategy Labs,
reviewed Facebook’s social advertising platform and calculated the
company had 3 million fewer users aged 13 to 17, a 25% drop, than it did
in January 2011. The site lost another 3 million users aged 18 to 24, a
group which obviously includes some older teens, representing an 8%
decline. Still, thanks to increasing use by older Americans, Facebook’s
overall U.S. membership base increased by 33 million, or 23%, to 180
million users over the three years, the study found.
That could be the root of the issue —
teens don't want to reveal much if they know grandma is watching. And
it's easier to avoid adults' prying eyes on less-complicated services
such as Twitter (TWTR) or Snapchat, which is rumored to have turned down a $3 billion takeover offer from Facebook last year.
The adolescent issue
Facebook's $1 billion purchase of photo posting service Instagram in
2012 was aimed at attracting more younger users. But Facebook has since
admitted it might have a problem keeping teens interested. “Our best
analysis of youth engagement in the U.S. reveals that usage of Facebook
among U.S. teens overall was stable,” CFO David Ebersman said on an
October 30 call with analysts. “We did see a decrease in daily users,
specifically among younger teens.”
The admission caused a minor sell-off in Facebook shares, though they
have since recovered. Trading at $57.44 on Thursday, the stock has more
than doubled over the past six months.
Analysts and advertisers have been split over the significance of the
possible teenage user decrease, with some dismissing the teen market as
less valuable than that of young adults. But teens eventually grow up
and become adults, so a drop in younger users could foreshadow bigger
problems in the future.
Shares of Twitter have climbed 37% since it went public in November, in
part on excitement that the short-messaging service was becoming more
popular than Facebook with young people.
After rejecting Facebook's overtures, Snapchat, a message and photo
sharing service that allows its content to disappear, has sought to
raise venture capital at a price valuing the company at $4 billion. An
initial public offering could follow later this year.
Facebook didn't immediately respond to a request for comment on the iStrategy study.
~ Aaron Pressman
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