Facebook Inc (FB) Is Still Losing Teens


Facebook Inc (NASDAQ:FB) is facing reports of a decline in a key demographic again. The company must be concerned about the declining popularity of its social media portal among teens aged 13 to 17 years. A recent report by Frank N. Magid Associates Inc. showed the proportion of social media users in this age group dropped to 88% for Facebook from its high of 95% in 2012.

During the same period, the popularity of messaging applications and Twitter Inc (NYSE:TWTR) increased in this age group. The report showed that Twitter usage among the same age group increased 2% to 48%.

Some Interesting Determinants

Concerns about the trustworthiness of Facebook Inc (NASDAQ:FB)’s portal is also playing a major factor. Among the survey participants, only 9% believed the website to be safe or trustworthy as compared to 30% for Pinterest, a web, and mobile application for online connections and sharing. When asked about fun interests, only 18% users said so for Facebook as compared to 40% for Pinterest.

Tero Kuittinen, a managing director at Magid in New York, said Facebook is deeply integrated in everybody’s lives and hence fade will be slow. People may start feeling dissatisfied and over a time they may consider stop using it.

Acquisitions Are Paying Off

Facebook Inc (NASDAQ:FB) must be enjoying the increasing popularity of its Instagram platform, which it acquired for less than $1 billion in 2012. Analysts at Citigroup Inc (NYSE:C) estimate Instagram’s worth to be around $35 billion given its outperforming user growth. Instagram has surpassed Twitter as far number of users is concerned. In addition, the users of photo sharing app are about 1.8 times more engaged than Twitter users.

In 2014, Facebook also purchased WhatsApp Inc. for about $18 billion, which is also one of the leading mobile messaging app. Facebook also offered a $3 billion deal for Snapchat takeover; however, its founder believed the app could fetch a greater valuation and rebuffed the offer.

Viraj Shah

Viraj Shah has completed M.Com (Finance) and is currently pursuing his CFP. He tracks US markets along with other global markets like India very closely. He is very passionate about stocks, real estate, and technology. He also believes that money can always be made in the market.

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