Are Facebook and Twitter ‘threatened with extinction’?

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Unless you’ve been offline for the last few weeks, you’re probably aware of the shock wave hitting the world of big tech companies.

Last month, it emerged that some of the biggest players in the industry—Apple, Netflix, Amazon, Microsoft, Meta (which owns Facebook) and Alphabet (which owns Google)—suffered a loss of more than $3 trillion in value. market in the last 12 months on the US Stock Exchange.

In November, several of them, including e-commerce giant Amazon, announced major layoffs that, around the world, already added 136,000 jobs as of Nov. 21, according to the website Layoffs.fyi, which tracks job cuts. technology jobs.

Some of the most substantial cuts came from Facebook parent Meta, which laid off 11,000 employees; and Twitter, which has laid off 3,700 professionals so far (about half of its workforce).

This has all raised questions about the future of two of the world’s most popular social networking platforms.

How big is Facebook and Twitter’s problem?

As the numbers above show, these platforms are exposed to the global economic downturn in the same way as other sectors.

That means less money being invested in the companies — particularly advertising revenue, in the case of social media platforms.

“Anyone trying to make money in technology right now is going to have a hard time,” says Professor Jonathan Knee, a media and technology expert at Columbia Business School in New York.

Knee claims that social media platforms have “basically become advertising companies”.

“When you’re dependent on that kind of income, a recession makes the environment very difficult,” he notes.

Meta’s latest financial report, released in late October, mentioned falling advertising revenues as part of the company’s woes, but also cited increased competition from rival platforms such as TikTok.

Twitter, which exited the stock market after being bought by billionaire Elon Musk, has also been hit hard and could face additional challenges linked to Musk’s acerbic leadership style and controversial decision-making.

But the warning signs were there before Musk arrived: Internal documents obtained by the Reuters news agency in October showed that the platform’s most active users – someone who logs in six or seven days a week and tweets about three to four times per week—were in steep declines since the start of the Covid-19 pandemic.

Reuters quoted a Twitter researcher as saying that the most active users make up less than 10% of the total, but generate 90% of all tweets and half of the platform’s global revenue.

Musk’s arrival, however, seems to have created another exodus. In a study published on November 3, just a week after he completed the purchase of the platform, researchers at the Massachusetts Institute of Technology (MIT), in the US, estimated that Twitter lost one million users.

life cycles

But is the current problem simply what some experts see as the end of a social media company’s natural lifecycle?

“Each platform has its own trajectory of growth and maturity/decline. They decline largely due to new platforms replacing them,” explains Natalie Pang, a communications and new media specialist at the National University of Singapore.

Pang believes that Facebook and Twitter “grew too little for their markets” during the most acute phases of the Covid-19 pandemic, in which millions of people around the world were subjected to lockdowns and other restrictions on movement.

“During the pandemic, technology platforms grew rapidly because digitization was a mechanism to deal with (the pandemic).”

Now, according to her, it is time to readjust.

Another expert who sees signs of decline on Facebook and Twitter is Lianrui Jia, a digital media expert at the University of Sheffield in the UK.

“We may have taken the longevity of these platforms for granted,” says Jia.

“Users may now be starting to recognize some issues with these platforms and going away.”

Both companies can boast huge user bases, but Facebook had nearly three billion monthly active users in Q3 2022, according to Meta, making it the most popular social media platform in the world. .

In February, however, Meta announced that the platform had lost users for the first time in its 18-year history, sending its stock down.

Since 2019, Twitter has adopted a metric that only considers daily users who can see ads, instead of total users. The most recent number, released in October, is 238 million, and it has been growing, according to the platform.

But there are concerns that what people are using the platform for is changing, moving away from news and current affairs towards more adult and cryptocurrency content.

This can make you less attractive to advertisers, who tend to avoid controversial content.

Renaud Foucard, professor of economics at the University of Lancaster in the United Kingdom, points out that increased regulation by governments has also become an obstacle for technology companies because it has made competition for users more fierce.

“In recent years, both the US and the European Union have made it more difficult for tech companies to simply buy their rivals, as Facebook has done with Instagram and WhatsApp in the past,” explains Foucard.

“More companies are now competing for users and revenue.”

fall into oblivion

Platforms sometimes disappear or become irrelevant.

One of the most famous cases is that of MySpace. The first social network to reach a global audience in the 2000s, it had 300 million users in 2007.

But it lost out to Facebook — and today it survives as a cross between an online community and a music streaming service, with just 6 million users worldwide.

In the same decade, Orkut, bought by Google, also briefly became the world’s most popular social networking platform before being left behind by Mark Zuckerberg’s platform — and was shut down in 2014.

Do these cases serve as a wake-up call for today’s platforms? Not every expert is pessimistic about their future.


Analysis by Joe Tidy, Cybernetics Reporter

The idea that we are witnessing the end of the natural lifecycle of social media is seductive.

One need only look at the social media graveyard to see plenty of evidence that this is a real phenomenon.

Bebo, MySpace, Vine, they’ve all come and gone.

But the tech world, over the years, has morphed into something beyond the platforms they operate on.

Facebook is a great example of this.

The company successfully future-proofed itself by buying Instagram and WhatsApp years ago to stay relevant.

While Facebook’s growth and popularity may have peaked, there are no signs of waning interest in the company’s other products.

Twitter also appears to be on the verge of going offline or forcing its users to migrate.

But will people really leave Twitter? I doubt it.

These platforms are only as good as their users, and the past five years have seen a consolidation of power and influence on these sites that will be difficult to replicate or pass on to alternative platforms.

Yes, sometimes an upstart like TikTok can step in to challenge the big names, but even in the past year we’ve seen other competitors come and go like Club House and BeReal.


Competition

Whether it’s just a stumbling block for Facebook and Twitter or the end of the line, some believe the fact that popular platforms are struggling is a good sign.

“It’s good that one of the reasons why these platforms are in trouble is the increase in competition”, reckons Renaud Foucard.

“In a fairer market, new companies can offer more options for users, there are more opportunities to provide better experiences for them.”

This text was originally published here.

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