Facebook to lose 80% of its users by 2017, according to a new study
The Facebook generation may be about to come to an end if Princeton University researchers are correct. A new study predicts “a rapid decline in Facebook activity in the next few years.” The study, conducted by two researchers in Princeton’s Department of Mechanical and Aerospace Engineering, applies the same model used in the study of disease to extrapolate future adoption and abandonment of social networks.
In the case of Facebook (FB
), the researchers used MySpace as a case study for a social network whose use spread rapidly, like a disease, and then quickly died out when the number of new users declined. The study finds that Facebook is “just beginning to show the onset of an abandonment phase.” The researchers believe that abandonment will accelerate to the point that Facebook could lose 80% of its users between 2015 and 2017.
The report also highlights the high valuations placed on social networking companies such as Facebook and Twitter (TWTR), $140 billion and $35 billion, respectively as of the report’s publishing last week. Again, pointing to the experience of MySpace, the researchers highlight the fact that News Corp bought MySpace for $580 million in 2005 during its rapid growth phase, only to sell it at a steep lose for $35 million in 2011.
Yahoo Finance Senior Columnist Michael Santoli this morning on Hot Stock Minute suggested that Facebook may be here to stay, albeit in a more understated way. “I think enthusiasm for Facebook will wane, but usage will not, said Santoli.” He also compared future Facebook use to that of Microsoft Windows and Outlook as examples of everyday-use products that may not have the cache of whatever the latest social-networking darling may be, but are a part of user habits.
To read the full study, click here.