When Facebook went public at a valuation that we now know was lofty, shares in the company dropped steadily. After falling as low as $17.55 on the US market, the company rebounded somewhat, closing nearly 55% higher since that time.
This short-term recovery deserves analysis. Facebook disproved naysayers (including this author) by generating revenue growth. Facebook’s ‘The Hacker Way’ is central to the way the company develops its software. Developers are encouraged to break things as they improve existing software or develop new products. The company runs product test releases on just a subset of users. This enables the company to predict the success of a product before it is fully-released.
Close-ended
Similar to stances taken by other social networks, Facebook changed its Terms of Use (“TOU”) for game developers. Developers may no longer access Facebook’s Open Graph data on other platforms. They are also limited in driving traffic to other sites. The move is having a positive result. Facebook now has 350 apps that have over 1 million users.
On Instagram, Facebook removed image previewing from twitter cards within feeds. Users now need to make another click before images may be viewed. The business purpose of this move is for Instagram to promote its own web services. Annoyed users will in fact be pushed to use Facebook’s photo-sharing services.
Finally, Facebook has modified its agreement with Zynga. In short, “Facebook will no longer be prohibited from developing its own games.”
Competition Heats Up
MySpace is back.
On the Google+ Explore page, a user posted that MySpace was accepting sign-ups. There is a waiting list for getting on the site and creating a page. On a side note, MySpace’s Tom Anderson is on Google+. He has 4.1 million users who have circled him.
MySpace is barely a threat for Facebook at this time, but the redesigned site makes its past barely recognizable.
Google+ is arguably a competitor to Facebook, but it has characteristics that make it more like Twitter. Either way, Google+ has greater functionality, including video hangouts, support for animated GIFs, and integration with email and Google search engine.
Google+ said it now has 135 million monthly active users (“MAU”). This is up from 100 million users in September. 235 million users are using Hangouts and the “like” button, otherwise known as +1.
Google’s 35% user growth is respectable, but in my experience, my growth on the site has been even greater. Since the site was last discussed, the number of followers grew from around 2,500 to 10,000 (see profile here).
Twitter vs. Google+ vs. Facebook Page Follower Growth:
While 10,000 followers is a big number, users are still more responsive to posts on twitter.
Conclusion
The retention Facebook has from its users is enormously high. Facebook users visit the site to keep in touch with friends. Google+ is infinitely larger than that in terms of scope, because the connections with users are more random. Both companies have their challenges: Facebook will need to pitch ads and generate revenue from apps. Google+ needs to maintain its relevance in search within the context of social networks. So far, Google+ has been a powerful tool for collecting information and having a dialogue with users worldwide.
Google
