It’s a tough question to ask of someone who never thought that Facebook should exist.

A combination of more innovative ways to engage (e.g. TikTok), bad publicity (leading to the new corporate umbrella) and the product life cycle may be at work here. Meta ought to be concerned about the slowing growth of its principal cash cow, especially with the collateral impact on advertising revenue.

Meta is underselling its issues, or “this time it’s different.”

1. Engagement is their core issue. If top users have churned to other platforms, it doesn’t matter if they fix monetization because they have lost their narrative. Last time they bought Instagram, they didn’t solve it themselves. Zuck has admitted as much.
2. Their ad platform is less effective than it was before. If they don’t solve their targeting and data issues, their revenue will still suffer even if they solve engagement. Which means they won’t be the company they were before.

Meta seems to stand for everything we think young people don’t like about the world – a lack of authenticity, a lack of accountability, a platform they trust less and less, and an obvious focus on making money over providing (to them) a necessary service. The reaction? Make Facebook less necessary – hello TikTok. Facebook should be very worried – they need a younger demographic to keep it going and they are losing credibility with anyone under 50.

Facebook has long been in decline with young people – a harbinger of real trouble for the platform – and it looks like that decline is finally starting to manifest in a meaningful way. I think Reels is too little, too late to attract TikTok users to Facebook, and I am not sure meaningful VR adoption will come along soon enough to reverse the growth trends for Facebook. Not that more than a billion engaged users is necessarily a bad place to be, of course, and I suspect Wall Street with eventually accept Facebook’s new normal.

There are lots of headwinds right now for Facebook, but the reports of the social network’s death are greatly exaggerated. Facebook’s decline among consumers ages 12 to 17 is estimated to continue, and just 35.3 percent of internet users in that age group will use the platform in 2022. In 2024, that figure will drop to under one-third. But, Facebook will add nearly 9 million U.S. users between 2020 and 2025 and its user base will get younger (Millennials and Gen X will make up more than half of Facebook’s U.S. user base in 2022).

But all that may not matter if public perception – and privacy issues – continue to drag down the social media giant.

Well, the problem is that Facebook is skewing older and older, and as users die off the young have moved on to Instagram and TikTok. Also, the company has the truly weirdest algorithm on deciding what posts are within and outside of community standards ever. More than once, I have said they give AI a bad name. They try to handle everything with bots and not people. Unfortunately, bots have no sense of irony.

Even I, who used to love it and am happy to be in touch with people I otherwise would never had seen again, am turned off (and have been suspended for a month for writing the ironic “if I told you, I’d have to kill you.”).

I actually think Facebook will need to become more human. Then maybe it will keep its declining base. It has become known as a faceless platform. Gotta have a human touch at minimum.

It’s definitely a concern – I’d argue part of the reason is due to their shift from being an innovator to a follower. The original Facebook and Instagram were the leaders in the space – now they seem to just be copying everything from Snapchat to TikTok.

The Metaverse is a step in the right direction, as they have more innovation there – but it also requires broad consumer adoption in a complicated way, including needing VR glasses, etc.

This is why the company also owns Instagram and WhatsApp. Their portfolio is modern and diversified enough that this doesn’t ultimately matter that much. Facebook has been losing relevance for a while in the states, and the product hasn’t evolved enough in the face of that to grow its base forever. This is a natural progression for the platform.

Mark Zuckerberg has developed a bit of a track record around not reading his audience. They’ve made missteps on privacy, misinformation, and now relevant content for younger audiences.

Competition is the consumer’s best friend. And market voids get filled a lot quicker these days. What TikTok has accomplished in its relatively short life is pretty amazing. The tendency for the younger, hipper customer to switch from the old and staid to the new and cool has always been a market dynamic. And now that dynamic operates on steroids. Facebook has very real competitive challenges to deal with.

Yes, Facebook/Meta should be concerned. Blaming competition for a slowdown doesn’t sound promising and younger audiences want the latest. Remember the campaign, “Not your father’s Lincoln”?

Phase transitions can rip your face off. The one Meta is going through fits such a category. The company’s pivot to the metaverse comes amid slowing growth in its core business which puts pressure on Meta’s margins and bottom line. The metaverse is a virtual construct in the making, and those companies that can influence its formation – from technology to user adoption- will reap extreme outsized benefits. The flip side is full of credible down risk should the metaverse takes longer to create, is slow in user adoption, or becomes a cesspool of extremism. Meta is betting on two things: the absolute inevitably of the metaverse and a loyal social media user base that transitions to the company’s next vision of the future.

Meta is undertaking a mega risk mega reward strategy without an apparent safety net. Buckle up, shareholders, the ride is just starting, and the timing couldn’t be worse.

The mass migration from Facebook by the younger generations to other more viral platforms is real, and it’s having a meaningful impact on not only the engagement levels but also the 4th quarter results. Unfortunately for Facebook, rebranding the social media giant as “Meta” is simply not enough to resonate with Gen Z or Millennials.

While the company has rebranded itself as Meta, and has gone all-in on their Metaverse investments, there is a question of the Facebook brand equity, and what does Facebook-Meta stand for in a world where social, political, and progressive stances matter? The negative publicity of the past few years isn’t helping. TikTok and Instagram have been able to capture the mindshare and the screen time of the younger generations, as their platform provides the opportunity to connect and build communities, which was the mission statement of Facebook.

In a word — yes. Meta has had multi-age problems for years, but where they use to run parallel to each other, they are starting to converge. First, there is the MySpace problem. People get bored with one social media network and younger people don’t want to share a social network with their grandparents. Then there is the issue of Zuckerberg’s ego which (incorrectly) made him believe he was the smartest guy on Earth and therefore capable of blowing smoke and out-gaming regulators, analysts, critics, competitors, and – ultimately – users forever. And then there are small issues like that whole data privacy thing and being a stooge for foreign governments, conspiracy theorists, etc. And, there is no metaverse. It’s a con. Yes there is, or will be, Web3, and VR, and AR and — as Second Life proved years ago — if you digitally build it they will come, and bring cash, but there is no “metaverse,” at least not yet.

Facebook/Meta should be very concerned. Their politics and approach to privacy have gotten in the way of being a neutral community platform. Not only have they lost users, their current users appear to be less engaged. I have personally seen my network go silent and transition to other platforms even though they still have FB accounts. This may actually be a good thing for big tech; the consumer in our society will define with whom and what business they engage and the advertising dollars will follow. Wake up Woke.

This is clearly an overreaction by the stock market, not supported by a similar drop in profits, users, or advertising. At no point did FB lose 30% of its profits, users or advertising. In fact it continued to grow in all areas, on all platforms. The real truth will be revealed over the next 6 months as FB bounces back and market pundits (as they often do) demonstrate how little they know or understand the dynamic in a specific market.

No, I don’t think the decline in FB’s usage is going to last longer. The catalyst here is the change of ways in which viewers get influenced. Earlier it was through creative advertising. Micro-influencers have now taken the center stage and TikTok is doing a good job at encashing it. As soon as FB identifies and sorts how to leverage influencer marketing for its users, it will start generating revenue again. Meta has always been an expert in delivering experiences that are relevant to its users. I strongly believe it will tailor its platform accordingly to retain and acquire new users.