The Facebook decline begins

How many times have you heard that Facebook couldn’t withstand another scandal or another breach of privacy? Nothing seemed to slow down its growth. After every outrage, users grew and Facebook got away with another breach of trust. That was true until suddenly it wasn’t, much to everyone’s surprise.

On February 2, 2022 Facebook (now called Meta) announced a loss of 1 million users in the quarter, the first time ever their user base has decreased.

Casey Newton, a tech columnist who follows Facebook, wrote in his Platformer newsletter:

“And yet today still feels like a milestone worth noting, if only because it illustrates the degree to which Facebook’s domestic problems have become a global one. Last year, the company reported that usage had begun to decline in the United States and Canada, where revenue per user is the highest. Until now, those losses have been more than made up for as Facebook grows in the rest of the world. But over the past quarter, competition caught upwith Facebook globally. The company lost users in Africa and Latin America as well as the United States and Canada. And while it’s possible that this quarter’s decline is only temporary, and that Reels or one of the other company’s initiatives will restart its growth engine, it seems at least equally likely that we will see further declines in the quarters to come.”

This is the day many of us had predicted, or at least had hoped for. We just couldn’t see how the company’s poor behavior on so many fronts could not face some sort of pushback from its users. It happened slower than many expected, but it’s now happening.

What was the cause? It’s been losing popularity among the under thirty population. It has lost the trust of millions of its users of all ages as it continues to clutter the feed with more advertising and inflammatory news from questionable sources. But a big impact was Apple’s new requirement that iPhone users be able to opt out of being tracked with all apps on their phone. Not surprisingly, most users are declining. Without tracking its users, Facebook is unable to provide the accurate targeting their advertisers expect.

Facebook is also still reeling from the disclosures by a company whistleblower, documenting how the company ignored or covered up their internal research describing the damage they were causing to teenage girls, minority populations and even governments.

And in this time of duress, Facebook has few friends or allies to work with. Zuckerberg’s behavior has insured that. They’ve never shown the least bit of true remorse or contrition, thinking they were invincible.

Facebook May seen this coming when they changed their name to Meta a few weeks ago. It represents a pivot to a new product initiative, a virtual reality world enabled by large unwieldy goggles and software.

The idea is to create a virtual world (metaverse) where people use goggles to participate inside this world, much like a video game. In this world players are able to interact with others, purchase virtual products, etc. But it’s still years away from becoming a mainstream technology, assuming there’s any interest.

Users of their metaverse’s gaming apps on their Oculus goggles, the closest thing to a metaverse experience, report a swath of bad behavior, with male players assaulting female players in their virtual world. Facebook apologized and said they’d add a bubble to prevent players from getting too close.

But if we can’t trust Facebook in the real universe, who’s going to trust them in a virtual one of their own creation? So for now it’s much more a vision than a real product. In fact, I doubt it will ever become a significant product for Facebook.

Ryan Broderick of Garbage Day explains the metaverse as “… not a platform that users will want to use. But it’s all Facebook has to fall back on now that its attempts to “build the metaverse” have been exposed as an absolutely ridiculous bluster. And it seems like that’s what they’re actually going to do.”

So Facebook is shifting to a product area few want from a company even fewer trust.

Since it’s founding, Facebook has been dependent on the success of its primary product, Facebook, for most of its revenue. Facebook has been poor at innovating, resorting to copying ideas from competitors or simply buying other companies, such as Instagram. But now being under investigation by the FCC, it’s unlikely they’ll be allowed to buy another company.

Once a company such as Facebook shows its vulnerability, the decline often speeds up. Employees no longer are eager to work for a company whose future is uncertain or on products with little viability. They lose confidence and question their leaders.

It’s time now to enjoy watching Facebook struggle and wallow in its troubles. It couldn’t happen to a nicer company.

by Phil Baker