A week from now on January 30th, Facebook FB will be reporting its next periodic earnings. While the share price has fluctuated since its now infamous IPO, the earnings call is predicted to show a good sign of recovery. Despite recent speculation that Facebook usage in the UK may have declined, Facebook is stronger than ever. The source of the speculation was started by the social analytics site Social Bakers and was picked up the UK's Independent Newspaper. The report highlighted that Facebook users in the UK dropped 600,000 in December 2012. Perhaps due to seasonal activity, all eyes will be watching the UK figures closely as we continue into 2013.
Firstly, so many websites and mobile applications have become dependent on Facebook's open graph technology for user login, the tie between Facebook and the third party users of such sites and applications is a bond that will be very difficult to break.
Secondly, since August 2012, Facebook advertising has given advertisers the opportunity of directing ads specifically at mobile users. This has been a great acquisition tool for mobile application developers who have apps listed in the iTunes store. It has also been the best and strongest initiative to date for Facebook to finally monetize mobile users. And seeing as more than 60% of users on Facebook view their account via mobile, this monetization aspect was crucial to the social networking giant.
Additionally, revenues grew on the back of Facebook page owners having to pay twice to show their fans page content. After Facebook altered their algorithm for Fan page posts appearing in users' news feeds, back in the last quarter of 2012, fan page administrators could not reach all of their acquired users with just a simple post. In order to reach their existing fans, brands had to pay for promoted posts in order to see more 'viral' reach. This also gave Facebook a boost in revenues.
The recent announcement of Facebook's graph project, which will map all users' posts, pictures and other interests, made the shares drop slightly on the back of the duration of the project. Up until now, nothing has been an overnight success and, in a climate where Facebook investors want to show returns, was probably not the best news for investors.
Finally, despite the drop in interest of social games, real money games will start to increase inside Facebook in 2013. Real money casino games, lotteries, bingo and poker will grow on Facebook in 2013 dependent upon regulated geographical territories. Gamesys and 888 have been among the first to partner with Facebook, but 2013 will see huge growth in this field. It's a little more than coincidence that, from all the titles recently dropped by Zynga ZNGA, none of those now excluded were casino related.
When Facebook launched in February 2004 it took just under two years to reach 25 million users in January 2006. A little over two years later the figures quadrupled reaching 100 million users in August 2008. A little less than two years after this, Facebook grew by five times reaching 500 million in July 2010. In October 2012 the number of Facebook users reached 1 billion.
Facebook still has a very strong user base. Additionally, the generation of the last 7 to 9 years who have grown up on Facebook and view it as a replacement for other web activity, including games, news, photo sharing, are now coming of age. Recent age demographic reports published by Pingdom, Social Media Today and All Facebook suggest that the highest percentage of Facebook users based on age is the 35 to 44 year old age bracket.
The second highest user group is 26- to 34-year-olds. This accounts for 18% of all Facebook users. With one billion users, the number of 26- to 34-year-olds on Facebook is 180 million. Now, based on the assumption that 50% of the current users in this age range have been using Facebook for the past eight years, this is approximately 90 million people who have 'grown up' with Facebook.
Ninety million people have come of age and have most likely entered the world of credit cards and online transactions during this. Where better to use them than their number one social network of choice, Facebook.
Where f-Commerce has failed in the past due to a mindset not yet convinced about purchasing goods inside Facebook, the new generation of online shoppers has grown up with nothing but Facebook for every whim.
On a final note, Facebook has already been proven to influence the masses especially concerning international and local politics. With all of the data generated by Facebook, it is my personal prediction that more intelligent consensus gathering applications will start cropping up. If Facebook were to manage this process from the inside it would have a lot more credibility with the Facebook audience and the monetization of such a dynamic could be endless.