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Facebook's growth in U.S. slows, as overseas growth ramps upJan 16, 2011 (San Jose Mercury News - McClatchy-Tribune Information Services via COMTEX) -- Even as Facebook closes in on its 600 millionth user, its growth in the United States and parts of Europe is slowing and may be approaching the saturation point, meaning its future increase in users will be ever more dependent on the developing world. Over the past six months of 2010, about one-quarter of Facebook's total growth in regular users came from the U.S., but during December, just 5 percent of the social network's new users were in the U.S., according to Inside Facebook Gold, a data service by the research firm Inside Network. Facebook gained more users in India, Mexico, Brazil, Taiwan, the Philippines and Indonesia than in the United States during December. Facebook's U.S. audience growth has decelerated for the past four months, raising questions among analysts about whether the Palo Alto social network is approaching its saturation point here, and highlighting Facebook's need to get people to spend more time on the social network in order to keep its revenue growing. A similar phenomenon is occurring in countries such as Iceland, Denmark and Sweden. Facebook now has about 146 million regular users in the United States, according to both Inside Facebook Gold and the German-Czech analytics firm Socialbakers. Data from both show that Facebook's U.S. growth has slowed significantly in recent months, and is on the verge of crossing the point where less than one-quarter of its users are in the United States. Facebook declined to comment on the numbers, which are roughly echoed by Internet tracking company comScore. "It's inevitable that in highly saturated countries growth has to decelerate," said Justin Smith, founder of Inside Facebook, who believes it's an "open question" whether Facebook is approaching its user limit in the U.S. "You can only get a certain percentage of the population to become active users, and as you get closer to that ceiling, you are going to slow down in terms of growth." Facebook now reaches a striking 73 percent of U.S. Internet users, according to comScore. Facebook user estimates from comScore, Inside Facebook and Socialbakers all translate to more than 55 percent of the total U.S. population over the age of 12, the eligible age to join the social network. "I would say this might be the U.S. reaching an inflection point," Jan Rezab, co-founder of Socialbakers, said of the recent U.S. growth slowdown in an e-mail message, "but only time will show if the U.S. can outgrow 50 percent penetration." The change does not mean Facebook -- pegged at a $50 billion value after Goldman Sachs and a Russian investor recently agreed to invest $500 million -- faces any foreseeable slowdown in revenue growth, experts say. But the demographic fact that there are fewer Americans every day who don't use Facebook means the social network will increasingly need to focus on getting existing users to come back more often and spend more time. With the vast majority of its revenue coming from display advertising, more time on Facebook equals more revenue for the social network. The good news for Facebook is that Americans on average spent even more time in 2010 sharing photos, updating their status and playing social games like Zynga's new CityVille. The average time spent by each U.S. Facebook visitor grew by 30 percent, to 320.6 minutes, over the past 12 months, according to comScore, with people spending about the same amount of time each visit, but making more visits per day on average. Andrew Lipsman, senior director of industry analysis for comScore, said new U.S. users, over time, will present Facebook with an opportunity to build audience engagement. "People go from being a new user -- they tend to be a little bit lighter user at first -- and the value of the site increases over time" as people build their friend network and have a stronger incentive to share content, Lipsman said. "It's really a self-reinforcing cycle." In December alone, Americans spent 49.3 billion minutes on Facebook -- the collective equivalent of about 94,000 years, comScore said. Facebook surpassed Google as the website with the most U.S. visits last year, according to Experian Hitwise. Facebook says an average user has 130 friends and creates 90 pieces of content a month. Facebook has become acutely aware of small factors that cause people to limit their visits and is making a big effort to tailor the experience of users to maximize the amount of time they spend on the site. Last year, as social games like "FarmVille" and "Mafia Wars" exploded in popularity, Smith said Facebook noticed that it had two types of users -- those who play social games and those who don't. The barrage of content from game-players wasn't welcomed by people who weren't playing the games. "Facebook changed the design of the news feed to only show game-related content to people who were playing the games," Smith said. Facebook's growth has been particularly strong in parts of Asia and South America, particularly in India and Brazil, countries where Google's Orkut social network has been top dog. Over the past six months, India gained 7.7 million Facebook users, according to Inside Facebook, second only to the 20 million new U.S. users. Facebook passed Orkut as the top social network in India in July, and is gaining in Brazil, Lipsman said. Indonesia, meanwhile, recently passed Britain as the country with the second-largest Facebook user population, data from both Inside Network and Socialbakers shows. Facebook is also rapidly gaining ground in several European countries, particularly Germany and Poland. And in Taiwan, Facebook gained more than 550,000 new users in December alone, according to Inside Facebook Gold, a 6.8 percent jump at a time that coincided with the playing of the movie "The Social Network," and wall-to-wall local media coverage of a visit by CEO Mark Zuckerberg and his girlfriend, after someone posted a picture (on Facebook, of course) of Zuckerberg visiting a Taipei market. "I think the sudden explosion of media coverage may have triggered more search traffic about Zuckerberg and Facebook on the Internet," Chris Lin, a Taiwanese Internet entrepreneur, said in an e-mail. Facebook gained about 9 million worldwide users in December, but only about 418,000 were in the U.S., according to Inside Facebook Gold. Socialbakers, which says Facebook should pass 600 million users in coming days, says the network actually lost U.S. users in December. One of Facebook's remarkable features, Smith said, is how consistent its experience is for users around the planet, right down to the universal blue color scheme. About the only difference, he said, is in Arabic, Hebrew and other languages where people read from right to left. Some people "said the cultural difference between these countries is too great -- how could someone in Asia use the same model someone in New Jersey uses?" Smith said. "It's turned out that those cultural differences are not as great as people thought, in terms of the value Facebook provides." Contact Mike Swift at 408-271-3648. Follow him at Twitter.com/swiftstories. To see more of the San Jose Mercury News, or to subscribe to the newspaper, go to http://www.mercurynews.com. Copyright (c) 2011, San Jose Mercury News, Calif. Distributed by McClatchy-Tribune Information Services. For more information about the content services offered by McClatchy-Tribune Information Services (MCT), visit www.mctinfoservices.com. |