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Facebook might face user fatigue in long run, says report

Facebook might face user fatigue in long run, says report

By Press Trust of India | Updated: 29 June 2012 11:10 IST

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Now there might be lots of 'likes' for Facebook but going forward user fatigue could pose the biggest risk for the world's largest social networking site, says a report.

Facebook, which currently has little over 900 million users, is projected to soon have one billion monthly average users.

"One of the biggest potential risks for Facebook would be user fatigue or reduced engagement," global financial services major Citigroup has said in a report on the social networking entity that recently debuted on the US market.

Facebook, which also has good following in India, has found itself among leading Internet utilities such as Google and Amazon.

"Anecdotally, it's hard not to find an example of someone who has dropped their Facebook usage or reduced their usage of the service, citing time constraints, reduced interest, etc. As a user/usage driven platform, fatigue trends could be a very significant investment negative," the report noted.

Apart from the possibility of user fatigue in the long run, other main investment risks cited include "zero presence" in China, the world's largest Internet market. Pointing out that Facebook has been largely shut out of China, the report said that partly this was due to local competition but "mostly on account of official and unofficial policies by the Chinese government to leave control of key media assets in local hands".

According to Citi, given that China has become the largest country in terms of Internet users, such a scenario poses a significant challenge to Facebook's global user and revenue potential.

On the positive side, Facebook has a lot of beneficial factors such as substantial market opportunities, unassailable position as social networking leader and major avenues in the untapped monetisation segment.

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