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Facebook user base drops in U.S., says report

Study shows Facebook starts to struggle once network hits 50% market penetration

Facebook appears to be losing users in the U.S. and other major markets, though its user base in parts of Asia is growing, according to an investment company report.

Facebook saw its U.S. user base drop by 0.7% over the last three months and 1.7% over the last six months, according to a report from Rory Maher, a senior Internet analyst at Capstone Investments.

The report was based on research that used proprietary software to analyze Facebook user growth in more than 200 countries. The report also noted that Hong Kong had a 1.7% drop and Singapore a 1.1% decrease in users.

All three areas, the U.S., Hong Kong and Singapore, Facebook has more than 50% market penetration.

The study also noted that of the 23 countries where Facebook penetration exceeds 50%, only nine showed increases in user base during the past three months. The other 14 countries had declines in users or, in a few cases, growth of less than 0.5%.

"Facebook penetration estimates indicate that growth starts to flatten or decline once a market exceeds 50% population penetration," the report notes. "We believe this could be an issue for future Facebook growth since we estimate that outside of Southeast Asia and some countries in Latin America, most markets are approaching 50% penetration."

Facebook had no comment on the report. According to its web page, Facebook has 901 million monthly active users.

Dan Olds, an analyst with The Gabriel Consulting Group, said if the Capstone study is accurate and the numbers show a trend over time, Facebook should be concerned.

"If there is a drop off in users, it's important for Facebook to note it and work to understand the reasons behind it," he added. "It could show that there's a ceiling on user accounts."

Olds pointed out that Facebook has captured more than 50% of the population in multiple countries. "That's incredible, but they're never going to get 100%," he said. "Facebook realizes this, of course, and will be working toward becoming a bigger and more important part of their active users' lives. While the gross number of users is important, how deeply they engage with it, how long they stay on it, what they use it to do are all critical success factors for Facebook."

The Capstone report comes a day after a separate report found that Facebook users are becoming less satisfied with the social network.

According to the American Customer Satisfaction Index, Facebook's user satisfaction rating dropped 8% over the last year to hit a record low of 61 on a 100-point scale. The report also noted that Facebook is not just the lowest-scoring social network, it also set a record-low score for the social media category.

But it's not all bad news for Facebook. The company saw dramatic growth in its user base in several countries. For instance, users in India grew by 20.3% in the last six months, while Brazil racked up a 45.6% increase and Japan, 60.3%.

Sharon Gaudin covers the Internet and Web 2.0, emerging technologies, and desktop and laptop chips for Computerworld. Follow Sharon on Twitter at @sgaudin, on Google+ or subscribe to Sharon's RSS feed. Her email address is [email protected].

See more by Sharon Gaudin on Computerworld.com.

Read more about web 2.0 and web apps in Computerworld's Web 2.0 and Web Apps Topic Center.


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