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You might remember the Product Life Cycle graph; the regular process
of adoption for a new product, and eventual abandonment, or a product.
It looks like this:
Maturity is the most profitable stage, but also precedes the decline.
So where is Facebook on this life cycle?
If we look at total popularity for the search term 'Facebook,' things don't look
SIDE NOTE: That big jump in popularity happened when Facebook released it's
earnings and reported $100 Billion in revenue.
If we transpose the Product Life Cycle graph over this, here's what we get:
Judging by the Growth Stage of Facebook adoption, we'd expect the
momentum to be slowing by now.
Of course, there are ways to delay decline. Apple updated their models
regularly, spiking sales and dragging out the tail of total sales.
You can see that in searches for "iPod":
How is Facebook preventing their decline?
The most important tactic FB uses is acquisition. They buy successful
Let's look at the Search popularity for "Instagram":
Instagram has had excellent growth. It might be decelerating slightly, but the
maturity peak hasn't been reached.
How healthy is Facebook?
The acquisition of Instagram has allowed Facebook's share price so maintain
SIDE NOTE: The little dip
from a few months back was
the 'Fake News' scandal and
the US Election.
This growth is essentially linear, which is surprising when you overlap share
growth and search popularity:
(Green is share price, blue is search popularity)
Not all Facebook acquisitions have been successful. Oculus Rift has passed it's
It's possible that Oculus Rift is waiting for a breakthrough that will bring them
into the market and trigger the actual beginning of their growth cycle.
What's Facebook's Revenue Like?
Their revenue is actually not bad; Monthly users continues to rise:
But Monthly Users in
the US & Europe are
Including revenue from the US & Europe.
There are two reasons for their revenue growth in stagnant markets:
1. Increased adoption by marketers.
2. Increased profitability of media selling.
Their revenue likely has a lot of space to move upwards as it capture the 'rest
of the world' and optimises profit.
Will they be killed by a competitor?
You would think they're at risk, but there are no clear contenders.
Snapchat is over the maturity peak, too:
Interestingly, Snapchat's IPO happened at almost the exact same spot on the
Maturity Cycle as Facebook was when it went public. Just over the peak.
Besides that, Snapchat now refers to itself as a 'camera company' and it
doesn't look like their focus is on creating a social network to rival Facebook.
The only real contender is Google+. This is completely unexpected, but search
popularity has almost surpassed Facebook's:
(Blue is Facebook, red is Google+)