When a young Mark Zuckerberg gave ‘theFacebook’ its debut at Harvard College in February 2004, few would have dared imagine it could ever turn a profit, let alone survive for more than a few years. Yet here we are, almost 5,000 days later, and Facebook, as it’s now known the world over, has just steamrollered past yet another incredible milestone:
“More than 2 billion people connect and build communities on Facebook every month”
Mark Zuckerberg, June 27, 2017
Facebook’s member growth has been as remarkable as it is relentless. Without missing a beat, the social network has increased its active user base quarter-on-quarter since data were first published late in 2008. And while growth slowed briefly in 2012-2014 while the company addressed some shortcomings in its mobile offering and battled intense competition from Twitter and others, it has since resumed its rapid upwards surge.
Chart: Facebook Monthly Active Users (in millions) 2009-2017
Today, adoption of the Facebook platform is so widespread as to be almost fully saturated in developed markets like the US and the UK. But there’s still plenty of growth potential for all social networks in developing nations across Africa, large parts of Asia and much of South America.
Alongside this core platform growth, there’s a remarkable backstory.
In April 2012, Facebook acquired a popular photo sharing mobile app called Instagram for US$1 billion.Since then the company has been working hard to protect and evolve Instagram’s much-loved user experience while retaining its distinctiveness from the core Facebook platform. In fact, today, most users remain unaware that Facebook and Instagram are owned and developed by the same people. It’s testament to good product management that the two platforms continue to thrive alongside each other, and Instagram now attracts over 700 million monthly active users. But, most remarkable of all, is the fact that the back-end data sets behind these platforms now work in lock-step. When a user does something on one platform, that information is instantly available to enhance their experience on the other platform. And advertisers will pay gladly for the audience insights and precision targeting this data amalgamation brings.
And, quite unexpectedly, in October 2014, Facebook completed its US$19 billion acquisition of WhatsApp, a private and group messaging service. The service has gone from strength to strength, largely replacing SMS texts for younger internet users and is now enjoyed by over 1.2 billion monthly users. When we add WhatsApp’s ‘mobile contact address book’ data into the mix, we can begin to appreciate the exquisite amount of data that Facebook now holds about the world’s internet users.
Today, Facebook remains an exceptionally acquisitive company with recent investments in innovative players in the virtual reality, machine learning and data analytics worlds. The next generation of Facebook users will experience a very different social network to what we know today, as Facebook Spaces develops from a primitive virtual reality world into a seamless, life-augmenting experience.
It all adds up to a heady and potent mix. The network effect, as aways, is all powerful, and the connected data it provides gives Facebook an extraordinary advantage over its many smaller rivals. Even new-kid-on-the-block apps like Snapchat have seen their growth stall in recent months. Instagram Stories, for example, has successfully wooed over many SnapChat users and has quickly gained a far larger user base than the once unstoppable SnapChat. Being able to draw in an audience from a diverse demographic pool of Facebook and Instagram users presents a near-impenetrable barrier to entry for start-up companies, however innovative they are.
But can the growth continue? All the signs today are positive, but the one thing that’s certain in our digital age is that nothing stays the same forever. It could take just one major data breach, one privacy conflict, one inescapably negative headline news story for Facebook’s house of cards to begin to tumble.
But I wouldn’t rush to write off Facebook just yet. If there’s one tech player that you should never take your eyes off, it’s Zuckerberg’s army of supremely talented developers.
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