By Dr Sean Carey
I have a confession to make: I don’t have a Facebook page. A few years ago I was encouraged to sign up by friends and colleagues when Facebook was primarily used by university students and lecturers. I resisted on the grounds that I was busy enough. I also reckoned that I knew enough people. In any case, if I wanted new friends and acquaintances it was best to meet them face-to-face.
I now realise that I am in a very small minority. A few weeks ago I asked a group of undergraduate students, aged between 19 and 34, how many had Facebook accounts. All of them put their hands up. Then I enquired whether any of them had accounts which had lapsed. It turned out that all of them had live accounts. This led me to ask how many in the class had used Facebook that day. All the students reported that they had logged on at least once before attending the lecture, which began at 11 AM.
I was intrigued. Although the group of students, mainly from the Greater London area, are not representative of the age (or social class) cohort within the general UK population the fact that around 20 students in the lecture room were committed Facebook users is indicative of an extraordinary social phenomenon – the recent emergence of diverse social media platforms in connecting individuals – sometimes friends sometimes strangers – with one another.
A few days later, I wasn’t at all surprised to learn that Facebook has 900 million users worldwide and made a profit of around $1 billion in 2011. Social media is definitely here to stay.
So what to make of the news that Facebook has just raised the price at which it will make an entry into the Nasdaq Stock Market from $28-$35 to $34 – $38, which will value the company at over $100 billion?
Certainly, the growth in value of Facebook, which only launched in 2004, is extraordinary by historical standards, especially when compared to companies operating in the manufacturing sector. Furthermore, a high-tech brand that has managed to keep growing while other social media sites like Bebo and MySpace have fallen by the wayside must be doing something right.
So is it down to good luck or good management? The latter I would say, especially because in the development phase in 2003 when it was known as Facemash, the social networking site developed by Zuckerberg, while he was a student at Harvard, was in competition with very similar services that were being created by contemporaries at other universities in the U.S.
Personality too has played a part in the spread of the Facebook. CEO Mark Zuckerberg, who turns 28 next Monday, comes across as a slightly nerdy brand ambassador. Nevertheless, this is a strong positive for a generation of young people hooked on social media, who greatly admire symbol-generating and transforming trailblazers, who are not obliged to resemble Olympic athletes or football stars.
There is a further point. Zuckerberg and his fellow executives, now located in Silicon Valley, have been quick to correct any obvious marketing mistakes made by the company, especially when resistance from users has been observed concerning the use of the platform for promoting and advertising other companies’ products.
And it goes without saying that the 2010 movie The Social Network, starring Jesse Eisenberg, Andrew Garfield and Justin Timberlake, providing an account in 121 minutes of the origins of Facebook was a gift from the PR gods. Despite Zuckerberg’s protests that it contains many inaccuracies, for many people, the triple Oscar award-winning movie, has created an unforgettable (and historically true) narrative of Facebook’s inception at the same time as it has generated demand for the product.
Nevertheless, the big question is: will Facebook continue to grow?
Evidently many investors think so otherwise there wouldn’t be upward pressure on the future share price. I see things differently from investors and analysts on Wall Street, however. Sure, Facebook will grow in the short term – perhaps even in the medium-term – not least because of the demand from youthful consumers in the emerging economies, but I am sceptical about the long-term prospects of the company.
Why? Cultural anthropologists know very well that all societies have age sets, which are building blocks for social organisation. In modern, complex societies where the consumption of branded products, services and experiences is a central activity – consumption makes up just over two thirds of the economies of the UK and US, for example – targeting young consumers is critically important in generating a high level of demand in specific sectors like music, fashion and food production, though not houses, pensions and other forms of financial investment.
Facebook is an example of a new and incredibly successful branded service – Google is another and it should be noted with a much bigger constituency – that drives consumption in sectors that crucially places a very high value on novelty and innovation. Which raises a highly intriguing question: what is the lifespan of such products?
It’s not possible to give a precise answer not least because the consequences of the dynamic interplay between specific services and demand from subsets of consumers in the population is difficult to predict.
But what we do know that is that computer science students and entrepreneurial types at U.S. universities including Stanford as well as in other parts of the globe like the burgeoning high-tech cluster in Shoreditch in East London look upon companies like Facebook and Google as old hat. It is, therefore, only a question of time before a new social networking experience is launched, which will not only be differentiated by content but more importantly will appeal to a younger but nevertheless economically powerful age set.
A final thought. When I asked my students who was certain that they would still be using Facebook in 20 years time, no one put a hand up.
I rest my case.
Dr Sean Carey is visiting lecturer in the Business School, University of Roehampton
* Published in print edition on 18 May 2012