Is Facebook losing its mojo?

Is Facebook losing its mojo?

Facebook, the once sexy Internet darling, appears to be suffering an image problem of sorts. From growing concerns about user privacy, to a changing user demographic, the company, after its purchase of Instagram and on the brink of its IPO, is in the midst of an evolution...

It wasn’t that long ago that Facebook was a little start-up venture, headed up by a geeky Harvard graduate, seeking to make it in the big world of Internet giants such as Apple, Microsoft and Google. It was the underdog to MySpace, which News Corp bought for a lofty US$580m in 2005 (sold for US$35m in 2011!). It was the new kid on the block, and people applauded its innovation and rise in popularity.

Fast forward but a few years, and the company is a month away from listing on the NASDAQ; a listing that will see the company valued at between US$85m-$100m, the largest Internet IPO since Google in 2004. And Mark Zuckerberg, its founder and major shareholder, has, in consumers’ eyes, gone from being David in a Goliath’s world, to just another billionaire profiting from their private information. Facebook is now starting to succumb to the same bad press that Google is beset with... the notion that the company tracks its users and shares data on user activity across all of its services.

In Facebook’s case, the Wall Street Journal recently contributed to this growing dialogue when it wrote of the many Facebook apps that are obtaining sensitive information about users. And while most of these apps request permission before accessing your personal details, the problem lies in the fact that the apps then gather information on your Facebook friends too, people who did not give such permission. This treasure trove of data on millions of users is then used to attract advertisers and app makers, as well as any other business opportunities that may derive from the possession of such a vast amount of useful data.

Facebook confirmed its status as ‘former minnow’ of the Internet world when it recently purchased Instagram for a cool US$1bn. Instagram, a photo sharing app, had yet to even monetise its product before Facebook gobbled it up. And there is a tangible fear out there that Facebook is going to get its grubby paws on photos that are being shared on the Instagram app, with many users downloading their photos and then deleting them to prevent Facebook from securing them.

Beyond its developing reputation as a violator of privacy, another trend has emerged that is contributing to Facebook losing its ‘cool’ factor (assuming it ever really had one). It appears that more and more parents and grandparents are signing up to the social networking site, which is naturally deterring younger people. This is a big problem for Facebook, as the company will not want the 18-24s to find a cooler alternative.... an alternative away from the prying eyes of their parents.

Facebook’s growth in terms of user numbers, cash in the bank, acquisitions etc may ultimately contribute to its undoing. It was unthinkable in 2004 that MySpace would largely become irrelevant in a matter of only a few years, and yet it happened. Facebook’s transition from minnow to behemoth may just see it become a club with so many members that belonging to it no longer bestows the exclusivity or cache some felt it possessed in its early days.  Sure, this hasn’t happened to Google despite some publicity woes, but then again, Google is not about social networking. Cool is not a prerequisite in the world of search engines, but the crowd that most advertisers target see it as an essential ingredient in their social interaction.

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