Has Facebook Reached a Saturation Point?

We're less than two weeks into the hyped Facebook (NASDAQ: FB  ) Home app launch and so far the app has been downloaded over 500,000 times. Facebook proponents would say the number of downloads is impressive considering the app only works on Android 4.0 or later, but skeptics may point to Facebook reaching its saturation point among users. Both points are valid, but there's more to think about then just download numbers and social platform fatigue.

Numbers can lie
The Next Web pointed out the other day that Instagram had 1 million downloads in the first 24 hours after its Android launch, compared to Facebook Home notching around 500,000 in about 10 days. That's not a completely fair comparison, though, because the camera app launched on a large number of Android versions, while Home can only be officially installed on the HTC One, First, X and X+; Galaxy S III, Galaxy S4, and Galaxy Note II.

What's more troubling for Facebook than the download numbers are the reviews in the Google (NASDAQ: GOOGL  ) Play store. So far, the app has received an average rating of 2.2 stars (out of five), compared to the Facebook app's 3.6 and Facebook Messenger's 4.4 stars. Ratings themselves aren't completely telling for an app, and if Home comes to more phones in the future, those numbers could certainly change, as they have with Facebook's mobile momentum. 

In its Q4 2012 statement Facebook said it had 1.06 billion active monthly web users and 680 million active monthly mobile users. Mobile users increased 57% from a year ago, which may be why CEO Mark Zuckerberg said back in December that Facebook became a mobile company in 2012.

But you could argue that the Home app is placing too much prominence on social media for some users. Even the company's commercials show an app that puts Facebook in your face -- all of the time. While this may seem like a good strategy for a company that needs its users to stay engaged with content (and ads), this could easily backfire. Both web and mobile Facebook users are inundated with ways to connect their accounts to Facebook, share content, and engage with company. While this has proven to be a great asset for the company thus far, at some point Facebook could be asking for too much user engagement.

A necessary evil
But tech companies are permitted a few missteps, if that's what Facebook Home turns out to be. Apple has had a number of them, including efforts like MobileMe and even the botched Apple Maps launch. Yet the company is at the top of the smartphone food chain along with Samsung, and the iPad is still the high-end tablet standard.

Or, take Google as an example.The Android maker is notorious for trying new products and services, only to shut them down later (ahem, Google Reader). Google has its hand it mobile operating systems, smartphones, tablets, navigation, search advertising, autonomous cars, and wearable computing. With so many products and services, there are bound to be some failures. Yet the company continues to create, test, and implement new products and it's arguably one of the most innovate tech companies to date.

Facebook made its name on desktops and it's making every effort to transition all of its social assets to mobile. Not every move will work, but it's imperative for the company to test what it thinks mobile users want. If Facebook Home is rejected by users, it may not be because Facebook has reached a saturation point among mobile users -- it may simply just be the wrong direction. 

After the world's most hyped IPO turned out to be a dud, most investors probably don't even want to think about shares of Facebook. But there are things every investor needs to know about this company. We've outlined them in our newest premium research report. There's a lot more to Facebook than meets the eye, so read up on whether there is anything to "like" about it today, and we'll tell you whether we think Facebook deserves a place in your portfolio. Access your report by clicking here.


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