Facebook: The Sinking Titanic of the Internet World

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Facebook is the single-most ubiquitous social-networking site in the world. It provides a way of connecting an individual with friends and family, a way of allowing a business to promote itself through cheap advertising, and is generally considered a necessity for anyone under 40 years old with a basic grasp of technology. But think back to 2004, when Facebook was still Mark Zuckerberg’s campus experiment and Myspace ruled the social networking world. Myspace came and went, and who’s to say that Facebook won’t do the same thing?

According to Quentin Fottrell of the Wall Street Journal, Facebook has a 54% market share that should not expect user-growth like it has seen since the beginning of its existence.  There is very little room for the company to grow as far as gaining new users globally, because its ubiquity has reached close to its full potential. Now, Facebook has to work to keep all of its users happy and active on the website in order to not lose any of that market share. With the rise of Twitter as a rival force in social media, Facebook’s market share could easily decrease over time, resulting in a decline in stock value and a potential financial predicament.

Not only is there a legitimate contender in the market, but there are also possible lawsuits that could cause major changes to the company itself. One recent class-action lawsuit accuses Facebook of illegally using individual profile information for the purpose of advertising. If settled in court, Facebook could potentially be looking at having to radically change the way it collects and shares information to the advertisers who pay to be on the site. Any negative changes in advertising could, again, affect the financial well-being of the company.

Facebook recognizes its growing problems and, without admitting it, is taking steps to bolster revenues. Over the past few months, the company has been testing ways to charge its users for sending certain types of inbox messages. “The charge for the test is $1 per message, but… the company is still looking for the ‘optimum’ price,” says Alistair Barr of Reuters. Clearly, Facebook is already scouting ways to maintain revenue growth and keep itself in a financially sound situation. However, this new charge may send some users away from Facebook and toward other social-networking sites, causing the revenue-boosting plan to backfire completely.

Facebook has grown rapidly and has sustained dominance over social networking for several years. Only time will tell whether it can continue to be a leading force on the web or whether it will sink into irrelevance with other Internet-service based companies of the past.

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