Is Facebook Vulnerable?

Over the last 6 months Facebook’s decline in personal sharing has been in the news a ton and the consequences of this decline have been rehashed over and over by tech bloggers.

So apologies yes I’m rehashing this news once more in my blog. But I think my very-late-to-the-party take is a bit more unique than many other news and blog posts on the matter that feel like they were copy pasted multiple times and slightly re-worded.

For those that haven’t heard about it yet personal sharing on FB dropped 21% last year while profits were unaffected.

The main issue for Facebook caused by this decline is it could possibly make Facebook vulnerable to a threat by a new social network. With less personal sharing this social network turns into more of a social link/news aggregator, which is a rather volatile and competitive market with sites like Digg quickly rising and falling. Without the core social network part Facebook would be practically worthless.

But I actually feel like Facebook really isn’t made that much more vulnerable by this news for a few reasons. I say this because there was really only one company capable of taking them down quick enough without being noticed too early. So let’s look at the list of requirements a company that started a new social network would need to take down the beast:

#1 The company has to be big enough to have the reach to quickly gain enough traction for a newly launched product before Facebook has the time to respond. The time of startups quickly rising and falling is very long gone. Many have tried and all have predictable failed when it comes to taking down Facebook (at least in the U.S. playing field). Any startup attempt has to be in a separate social niche and or has to be built up slowly over many years rather than the overnight dream crap so many have lusted for.

#2 The company can’t be too big or corporate feeling otherwise the product won’t feel special and people won’t return after they sign up or be more willing to share personal stories there. Google+ is a good example of this, though it did find it’s own niche in the social arena but definitely didn’t pose as much of a threat to Facebook as Google was hoping. Nobody want’s to switch to one big corporate machine to a different one when they can just stick to the one they’re already on.

#3 The company should already run a social site that would feel natural to extend into Facebook’s market. If you were someone like Reddit and told all your users hey download this new completely separate social app not enough of them would download it quick enough to gain the momentum required to retain them and there would be far too much time for Facebook to respond to the threat.

I’ll get back to that list in a second. So Facebook’s immediate response to the decline appears week on the surface. Live video sharing? Like that’s going to fix anything. But let’s look a little deeper. There are plenty of obvious actions they could take to fix the problem and their hordes of smart people undoubtedly have thought of them already and more.

So I believe the reality is likely that Facebook doesn’t actually need a stronger response at the moment. The only company that fit the above list of requirements and had the capability to gain enough traction to compete before Facebook took notice was Instagram.

Initially many mocked Facebook for their decision to buy Instagram, all it did was simple photo sharing only on a mobile app and there have been so many photo sharing sites before it that have come and gone. But it begins to look a lot smarter if you look at it as they just bought the only company capable of dethroning them for a long time for an absolute steal at 1 billion dollars. Instagram was already on a good chunk of phones of people in their teens and 20’s and was gaining more and more steam. Most importantly the people that were using it were friends with their real life friends so it was being used a personal social sharing app. It wasn’t a Flickr style share with the internet and some internet or personal friends kind of service.

As a social photo sharing app Instagram was only a handful of features away from Facebook and they had already dealt with scaling to millions of active users with the bandwidth heavy image sharing. Just a little after the buyout Instagram released direct messages which likely was in the works before being bought and was one of the missing features it needed. Instagram could have very naturally been extended to include the rest of the full on social network type features such as text only posts, a more robust profile section, full browser support, etc. And they could’ve done it without having to get user’s to download a new app, they could’ve simply slid the new features into the existing Instagram app and maybe do a little marketing rebranding work. After that Instagram users would eventually notice Instagram basically does everything they need that Facebook gives them without the annoying bloat and corporate feeling and hey most of their friends are already here.

There’s some chat apps and niche social apps that maybe have a few things in common with Instagram’s previous position but it really doesn’t feel like any of them meet all the criteria.

So if there was a actual real new Instagram level threat rising there are number of things Facebook could easily do even in their current seemingly vulnerable state. Here’s a few obvious ones that immediately come to mind:

#1 Remove Buisiness/Follower accounts or limit their abilities. Would that make a lot of people and businesses mad? Of course it would and it might make a small dent in profits too. But it would get rid of the annoying ‘Gary the Goat’ re-shares in your news feed that are making Facebook feel less personal and would encourage people to stick with Facebook.

#2 Remove any new and gimmicky monetization attempts. There always seems to be a new thing Facebook is trying this month to get a little more money. Currently on my front page there’s some ‘Send money’ buttons a ‘Shopping’ link and probably more I’m not seeing. Many of these new money grabbing additions could likely be removed without hurting income too much as their core standard advertising deals make up the bulk. Removing these would improve Facebook’s personal feeling and reduce annoying clutter.

#3 Just buy the company (like they’ve already done before), most any attempt to make a social network besides the long gone Instagram that gained enough of a following to make Facebook feel threatened would be too slow to do so. Facebook would notice as early as possible and the owners would be likely happy to sell when they had the chance.

All those things only need to be used when there’s an actual real threat. Which is why they really don’t need to care at the moment about the decline in personal sharing as long as they’re still making the same money.

To answer the title’s question, is Facebook Vulnerable? No not really, the decline in sharing will not make them more vulnerable to a new player anytime soon and they bought out their only potential threat under everyone’s noses. Though there is always a small fractional percentage chance someone could take over but that chance is still as small as it was before.

Thank you for reading!
(accuracy of facts/statements in this post not guaranteed, research is hard and I’m too lazy to cite anything)

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