Up until Facebook (NASDAQ: FB), every other one-time successful social network followed the same arc: explode in popularity by being hip, become mainstream and acceptable, then quickly flame out. MySpace was once the hot place for young people on the Internet. So was Friendster. Neither survived the trip from cutting-edge cool to "your mom's on there too" credibility.
Facebook became the hot, new, cool thing for teenagers, helping to crush MySpace and Friendster, but that ended somewhere between the closing credits of "The Social Network" and the moment your mom "liked" a picture of your drunk friends. But unlike its predecessors (which really go all the way back to the early Internet message boards), Facebook became so popular that it not only survived becoming not hip, it has actually thrived.
Teens, however, are leaving Facebook in significant numbers. iStrategy Labs said last week that "Facebook's teen base had fallen 25% in the past three years." Facebook CFO David Ebersman confirmed that the issue is real during a recent earnings call, though he didn't give any indication as to how serious the problem might be. "We did see a decrease in [teenage] daily users, especially younger teens," Ebersman said.
The iStrategy Labs study draws from Facebook's Social Advertising platform to glean exactly how many young users have left the social network in recent years. The resulting estimates are pretty staggering. According to iStrategy, Facebook has 4,292,080 fewer high-school aged users and 6,948,848 college-aged users than it did in 2011. The study also showed that teens (13-17) on Facebook have declined 25.3% over the past three years.
That sounds like bad news, and it definitely shows that Facebook is not as hot with teens as it once was. But perhaps that's because younger people, by nature, want to go places where their parents and other adults aren't. Once mom and dad got into the digital clubhouse, it makes sense that kids will feel less comfortable and look for online hangouts that the 'rents have yet to figure out.
Why Facebook need not worry
According to the same iStrategy Labs Study, the number of users 55+ has exploded with 80.4% growth in the past three years. Those older users may not be as desirable as teenagers, but they are more stable and less likely to leave. Once Grandma learns how to use Facebook and has all her birthdays and other items set up, she's not going to jump to SnapChat because it's cooler.
And while the 55+ plus crowd may not be as sought after by advertisers as 18-34 (sorry, CBS primetime), neither is 13-17. Realistically, if young people avoid Facebook because it's where their families exchange pictures and birthday messages, aren't they likely to join up as they move through the 18-34 years and those things start mattering more as they move away from home, get married, and have their own kids? Facebook may not be hip, but there's a pretty good chance that it's where your high school reunion is being discussed.
But what if they never get the habit?
The fear for Facebook -- if the company should fear anything -- is that if teens don't adopt early, they will simply end up elsewhere. That has sort of happened in the news business where young kids who never got exposed to newspapers never pick them up later in life because they learn how to glean their news from others places. That fate seems unlikely for Facebook with the current Facebook alternatives that are hot -- Instagram (which Facebook owns) and Twitter -- because both offer fairly limited functionality.
Of course, Facebook, like any other technology, is vulnerable to the next big thing. But that would be true even if the company had somehow managed to stay cool to teens while also being a place for their parents.
Fool contributor Daniel Kline has no position in any stocks mentioned. The Motley Fool recommends Facebook. The Motley Fool owns shares of Facebook. 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.