I agree with Veritasium wholeheartedly on this topic, but I’ve never seen it put so eloquently. (I may disagree with his assessment of online video’s opportunity but that’s another story):
Allow me to summarize:
- FACEBOOK HAS PROBLEMS WITH PLATEAUING REVENUE
- FACEBOOK IS ACTIVELY CONSTRAINING/FILTERING WHAT USERS CAN SEE
- FACEBOOK IS INJECTED ADS INTO PEOPLE’S FEEDS BECAUSE THEIR EXISTING ADVERTISING DOESN’T STICK
- FACEBOOK IS CHARGING PAGE OWNERS TO ALLOW THEIR FANS TO SEE THEIR POSTS
This is angering both their users & their advertisers… and they’ve only just started.
I will add in one more thought: I’ve spoken with a very intelligent, highly credentialed researcher who’s been invited to both tour & speak in front of virtually all the major online players including Microsoft, Google, Amazon, Apple, Yahoo, Twitter, Instagram, Yelp, FourSquare, Tumblr, etc.
He made a few very sobering comments:
- He understood the monetization model very clearly for all the major online players that he’d visited & could see the growth trajectory for all of them… except Facebook.
- He noticed that Facebook, fascinatingly, even with its billion users, can’t seem to get even a small fraction of their users to provide credit cards, leaving them entirely at the mercy of their advertising strategies.
- He noted that based on his discussions with Facebook strategists, it seemed clear that they were riding a wave and even with their massive graph, they seemed confused as to how they were going to continue to grow.
He had several other things to say that I can’t post here but the jist is that he was least confident in Facebook’s long term potential amongst all the companies he’s been invited to. So when I see things like the model described in the above video, it becomes apparent to me that Facebook, for all it’s growth & size, still hasn’t been able to persistently monetize its user base for long term growth.
I’m curious what that means for them long term.