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By the numbers: Do we have Facebook fatigue?

Privacy controversies might have slowed Facebook growth, or maybe everyone who wants a page has one.
Privacy controversies might have slowed Facebook growth, or maybe everyone who wants a page has one.
  • Report says Facebook added 320,000 users in June, down from massive 7.8 million in May
  • Possible privacy controversies hurt growth, but could be an aberration
  • Also possible all internet users who want a Facebook page already have one
  • If the site has peaked, Facebook may need to look for alternate funding sources

(Wired) -- Have we reached the Facebook saturation point?

That's one possibility suggested by monthly growth data from Inside Facebook, which reports that Facebook gained only 320,000 new U.S. users in June after a blockbuster gain in May of more than 7.8 million.

Moreover, the net's dominant social networking site lost active users in the 18-25, 26-34 and 35-44 demographic ranges, while gaining users in their mid-teens and middle years.

One possibility is that the May and June controversies over Facebook's privacy policies and dominance have kept the company from tremendous new growth and even led some to curtail their use.

Another possibility is that it's just a statistical aberration, or a result of changes to the advertising system, where Inside Facebook says it gleans its numbers.

But there's also the possibility that almost every American who has any interest in joining Facebook already has. Facebook says it has about 125 million active U.S. accounts and is likely closing on half a billion accounts worldwide.

According to Inside Facebook, some 41 percent of Americans have Facebook accounts, a rate surpassed only by the U.K and Canada, which clock in at 44 percent and 48 percent respectively.

What would peak-Facebook mean for the company?

Certainly not irrelevance, since Facebook is now the second most visited site in the world after Google and is the largest photo sharing site on the net. However, it's yet to prove that it can create a money-making machine like Google found in tiny search advertising tied to what users search for, not who they are.

Facebook's ads, by contrast, are all about knowing what you are interested in, according to the data you tell it.

Advertisers have powerful ways to target ads at users. One techie even created an ad specifically for his wife by targeting his ad at very select criteria -- geography, degree, gender and interest. As a private company, Facebook's revenues are not publicly disclosed, but the company has confirmed that they are close to $1 billion. That's a pittance compared to Google's $25 billion in annual revenue.

Investors, including Microsoft, have invested in the company with a valuation of $15 billion.

But if Facebook has hit its peak in terms of U.S. users, the company will have to turn its attention to finding ways to make money off the site, not just add more users.

It's increasingly weaving itself into the fabric of the web, and it now seems odder to see a news story without a Facebook 'Like' button than with one, even though that feature has only been around a few months.

The other problem with the possibility of hitting peak-Facebook? There's only one way to go from there and that's down. Users are finicky, and Facebook could find itself caught in a battle of just trying to retain users who might jump ship to Google's rumored new network or even just decide they are tired of maintaining a social networking profile.

Facebook did not immediate respond to an e-mail seeking comment.

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Copyright 2011


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