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Facebook's Effort to Transform Comes Amid Drop in Users

Facebook's Effort to Transform Comes Amid Drop in Users

By Elizabeth Dwoskin, The Washington Post | Updated: 12 March 2019 16:42 IST

Facebook chief executive Mark Zuckerberg went public last week with his plan to reorient the embattled social network toward encryption and privacy - transforming Facebook from a boisterous global town square into an intimate living room, according to a philosophical essay posted to his Facebook wall.

The essay was 3,200 words, but Zuckerberg managed to avoid mentioning how far users have already moved away from his town square - a reality that may help explain the boldness and urgency of Zuckerberg's announcement.

A dive into some little-seen data suggests that Facebook may be in a bigger mess than it lets on. It shows a precipitous drop in the amount of time people are spending on the core social network.

Recent polls also have pointed to a trend of people deleting Facebook. A quarter of US Facebook users surveyed by Pew Research Center last September said they'd deleted the company's app in the previous year. On Thursday, Edison Research concluded that Facebook has 15 million fewer users in the United States than in 2017.

Facebook's own data tells an even starker story of how the social network is steadily losing the grip it once had on people's attention.

Years ago, Facebook created a partnership with TV ratings company Nielsen in which the social network agreed to share a monthly representative sample of its usage statistics and demographic data with the ratings firm. A subset of that data, from a two-year period between August 2016 and October 2018, was analysed in December by Brian Wieser, then a securities analyst with Pivotal Research focusing on Facebook. (He's now the global president for business intelligence at the media conglomerate GroupM).

According to the analysis, people in the US have been spending a lot less time on Facebook and on Messenger since 2016 - about 10 percent less time per person in any given month than they had in the same month the previous year.

And that is true for all age brackets.

Fox example, US users over 18 years old spent 10 percent less time on Facebook in October 2018 than they had in the same month the previous year, and they spent four percent less time on Facebook than in the same month in 2016. In September 2018, 25- to 44-year-olds spent 25 percent less time on Facebook and Messenger than they had the previous year. The same was true for 55- to 64-year-olds. In some months, people ages 18 to 24 were using Facebook more than 30 percent less than they had the previous year.

These numbers represent only a fraction of Facebook's users - the company often touts that it has 2.3 billion users worldwide, fewer than 10 percent of whom are in the US. But most of its revenue comes from serving US and European users - the ones who are drifting away. The company's messaging apps - WhatsApp and Messenger - are more popular outside the United States, but deliver almost no revenue for the company.

Notably, the declines began well before Zuckerberg's last major announcement of a product change, on a Wall Street earnings call in January 2018, when he said the company would start removing news content from people's feeds in order to focus more on content from friends and family. At the time, Zuckerberg said the move would purposefully reduce the amount of time people spent engaging on newsfeed. But the Nielsen data show that the drops Zuckerberg told Wall Street were coming had been happening for months prior to that.

In this light, Zuckerberg's note last week may represent an effort to transform the company, but it also looks like damage control.

Facebook declined to comment. A company official said it was too early to speculate about how the company would make money off messaging.

But there's a potential solution in Zuckerberg's plan for the seamless sharing of data and communication between the four apps - what he called "interoperability" in his post last week. Interoperability may be an attempt to save Facebook from decline by giving Messenger and the main platform a boost from the faster growing parts of the business, Instagram and WhatsApp. The independent-minded chief executives of Instagram and WhatsApp -- who clashed with Zuckerberg over integrating their services -- have both left the company in the last year. They've been replaced by longtime Zuckerberg deputies who are ready to integrate the services -- and to figure out how to squeeze revenues out of that integration.

Siva Vaidhyanathan, director of the Center for Media and Citizenship at the University of Virginia, has suggested that Facebook's move wasn't about privacy at all: Zuckerberg has never appeared to care much for privacy, Vaidhyanathan wrote in the Guardian last week, but he cares about winning, and his plan to go all in on messaging services can be seen as an attempt to reel back people who already are leaving in droves.

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