Social media site Facebook has seen the biggest plunge in their market value to date, decreasing by approximately 20%, and $120 billion USD. This is the largest decrease in market value within 24 hours by any US company. But what does this mean for Facebook users? Will Facebook fall down the same hole as MySpace and exist only in the memories of users, or can it stand the test of time and financial losses?
There are several pretty big implications on Facebook users that have come as a result of Wall Street’s latest shocking announcement. The worst case scenario is that Facebook will simply stop being used; but despite the miserable figures and a drastic downslide in market value, this may not be a reality for a long time. University of Southern California academic Safiya Noble believes that Facebook plays too big of a role in people’s lives for it to disappear completely.
“For many people, Facebook is an important gateway to the internet,” Noble told The Guardian.
“In fact, it is the only version of the internet that some know, and it plays a central role in communicating, creating community and participating in society online.”
As far as I’m concerned, the only thing to die with Facebook would be the selfies our 14-year-old selves thought were cute, and the subliminal messages we sent to “no one” in our statuses. In that case, see you later Facebook. It was fun while it lasted.
The decreasing figures can be attributed to the recent mass data leak, which saw 3 million users have their personal data and information exposed. This sparked a national enquiry into the use of personal data for political and commercial purposes. Users now have the option to share less information on the site to avoid another potential data leak. This has some pretty negative implications on advertisers and marketing executives who rely on Facebook for advertisements. The less information people share, the less data is collected. This means advertisements displayed will gradually decrease. Advertising methods like ‘cookies’ rely on personal data to generate ads according to the information and interests of specific users. If people aren’t sharing their data, how do advertisers cater their content to particular people? It can’t happen.
Nobody seems to be too concerned about the losses, despite how staggering they are. Analyst Gene Munster knows just how erratic the company is in regards to their fluctuating market value.
“The company has a track record of resetting revenue growth and expense expectations only to turn around and exceed those expectations the following quarter,” Munster wrote in a note to concerned Facebook investors.
On the opposite side, Facebook now have to rethink their own marketing strategy. The team are having to brainstorm some new ways to lure people into the site, and to re-attract existing customers losing faith in the platform; which means some shiny new toys for us hopeless users. Talk of virtual reality utilities and more video content are currently in the works. Zuckerberg is even playing the role of matchmaker, announcing plans to create a dating app, to help out the 200 million ‘single’ souls perusing through Facebook right now.
Of course, CEO Zuckerberg is feeling the aftermath of all this drama. He has now fallen to become the sixth richest person in the world from his original third place position. His earnings also dropped from $86 billion to $70 billion USD. Somebody get this guy a shot, he’s having a rough week.
This might just be the kick Facebook needs to up their game. As if the data leak wasn’t enough, they’re now having to justify this massive blow. It will be interesting to see just how Zuckerberg launches a comeback from this one. What will be even more interesting will be all the new toys and devices we’ll be able to play with. Instagram have just released IG TV which is taking the app by storm.
So let’s see what you’ve got, Facebook.