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The Facebook fever finally breaks

The Facebook fever finally breaks

In the last quarter of 2013, Facebook, during their earnings announcement, reported to have seen a drop in their daily usage, especially with high concerns with the decrease in the usage observed in their teen users, which is usually a reliable segment to point the rest of the demographics towards uprising trends. The report stated that Facebook users still have active accounts, but they are using these accounts a lot less frequently.

One of the more obvious reasons that Facebook usage has seen a decline, especially amongst teenagers is that the social networking platform is no longer viewed as a safe space for the youth to interact without any inhibitions but more as a requisite tool for communication that young people retain merely because everyone else does. Facebook, in reaching an aspiring number of 1.2 billion users, might have become a casualty of its own triumph as the demographic range of users expanded to parents, teachers, bosses, aunts, uncles and even grandparents having started to use Facebook, and young people can no longer generate content at leisure without any sort of consequences. Facebook is no longer viewed as ‘fun’ but more like a necessity for maintaining a social presence.

A direct contributor to this situation is thought to be the widespread availability of mobile messaging applications such as WhatsApp. Since its launch in 2008, WhatsApp has given a tough competition to mobile network operators, with a reported loss of $23 billion in SMS revenues in 2012 alone and now is proving to be a strong contender against social networking platforms too. WhatsApp provides a much more dynamic but private platform for free instant communication and is readily accessible on WiFi and mobile data plans.  Aside from the invasion of the older generations on social networking sites, mobile messaging provides access to a more real-life socializing scenario that involves real- life chatting with contacts a customer would typically have on their phones already, thus eradicating the idea of having a predominantly virtual social existence and replacing it with a relatively more real-life one. The application has a total of 350 million active users a month, which exceeds the number of users for the sweetheart of social media, Twitter, at 218 million users.  Statistics show that the pioneering segment that mostly uses mobile messaging applications on their phones is under the age of 25 years. WhatsApp currently stands as the most popular messaging app in the UK, and can be found on approximately 95% of smart phones in Spain alone. 90% of the Brazilian population and three-quarter of Russians have been reported to be using mobile messaging applications actively, hence resulting in a decreased usage of social networking platforms.

Silicon Valley technicians and several other industry observers estimate WhatsApp to be valued at approximately $5 billion through their annual subscriptions, followed closely by the California-based application Snapchat, which is roughly valued at $ 2-4 billion, and is becoming extremely popular because users can exchange photographs without leaving a permanent digital footprint, hence retaining their privacy. Mobile messaging applications may be favourable because of the ‘personal’ factor, but aside from the much appreciated lack of online advertising and spam, mobile messaging applications are nothing short of social networks themselves, as users can exchange music, create groups, promote events, upload statuses, play games and send stickers. A pertinent example of an all rounded, profitable mobile messaging application comes out of Japan, where the application called LINE, profited the company $58m in sales in the first quarter of 2013. 50% of the sales are accounted for through the selling of games and 30%, or roughly $17m, from sales of its 8,000 different stickers. Some are free or, in Spain where LINE has 15 million registered users, charge around EUR 1.99. Asian chat apps like Kakao Talk in South Korea have generated $311 million in sales through games alone in the first quarter of 2013.

However, despite the rapidly growing popularity, the prospects for these messaging apps are still uncertain. Analysts in the industry foresee buyouts from giant internet companies like Google, which was already whispered to have flirted with WhatsApp earlier this year. However, what remains to be seen is how established platforms such as Facebook will proceed in the future in the light of the decrease in their daily usage because of the unforeseen competitions from mobile messaging applications.  

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