A new study shows Facebook's (NASDAQ:FB) teen problem in the U.S. may be worse than previously thought. The study from iStrategyLabs shows self-reported teen users have fallen by 25% during the past three years, while self-reported users in college are down nearly 60%! Read on to find out more.
The question of teens leaving Facebook has been a hot topic this year, as multiple surveys have shown teens losing interest in Facebook. Investors are worried that this could be the start of a larger trend. How worried? Facebook shares were up 15% after reporting better-than-expected earnings in Q3, but gave back those gains after Facebook CFO David Ebersman acknowledged Facebook is becoming unpopular with teens.
[W]e did see a decrease in daily users specifically among younger teens. We won't typically call out such granular data, especially when it's of questionable statistical significance given the lack of precision of our age estimates for younger users, but we wanted to share this with you now since we get a lot of questions about teens.
Ebersman didn't lay out any specific data; however, he did add, "We are pleased that we remain close to fully penetrated among teens in the U.S." Close and falling may have been a better description.
Many surveys have found that teens are leaving Facebook because their parents are now on there. CFO Ebersman has said before about teen usage that, "This is a hard issue for us to measure, because self-reported age data is unreliable for younger users." However, Facebook is nearly 10 years old, and plenty of adults were on it three years ago. While some of the decline may be attributable to more kids lying about their ages, it's hard to believe that it could account for the entire drop.
What are teens using?
Teens are fleeing to platforms which provide more privacy control where their parents can't get access. Twitter appears to be the big winner according to a study from Piper Jaffray; however, Instagram, Snapchat, WhatsApp, and Kik are also popular and gaining.
Facebook is aware of the disruptive threats that these platforms provide. The company bought Instagram for $1 billion in April 2012, and offered $3 billion to Snapchat, which Snapchat turned down. Other social networks that could be a threat include Yahoo!'s Tumblr, and Google's Google+, now that all Youtube accounts are Google+ accounts.
Is it all bad?
There's still a lot of positives for Facebook. Overall users are up 22% in the U.S. during the past three years. Facebook has established itself in mobile advertising, which is a large and growing percentage of how people access the Internet. Those users are also more likely to be older, which means more spending power, and less tech savvy -- which means they will see ads. According to Fool analyst Adrian Campos 2014 will be a great year for Facebook, even after rising more than 100% in 2013.
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Dan Dzombak can be found on Twitter @DanDzombak or on his Facebook page, DanDzombak. He has no position in any stocks mentioned. The Motley Fool recommends Facebook, Google, Twitter, and Yahoo!. The Motley Fool owns shares of Facebook and Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.