Facebook (NASDAQ:FB) remains a story of slowing user trends and surging monetization metrics. Wall Street likes to focus on revenue growth and the shift to mobile, but the real story is the peaking user base and limited growth in the developed world.

The social media giant now has 1.28 billion monthly active users, or MAUs. But the real issue is the engagement of those users. The news reports continue to suggest lower user engagement, especially in the younger crowds, but the headline numbers from Facebook don't necessarily match the reports.

The biggest issue is that Facebook doesn't provide engagement metrics showing average times spent on the site. To compare with Internet search giant Google (NASDAQ:GOOG), the company continues to generate considerably higher user engagement, or paid clicks, while the monetization of those clicks declines.

Stalling developed country growth
The big problem not really explored by investors is that MAUs in the U.S. and Europe have peaked. The majority of revenue gains now are based on higher monetization of existing users. For the last year, MAUs in the U.S. have only grown from 195 million at the end of last year's first quarter to only 201 million now. The growth rate is now down to a paltry 3.1%. European growth is better at 7.4%, with the user base expanding by 20 million to reach 289 million users over the last year. Sequentially from the fourth quarter, the combined user base in Europe, U.S., and Canada only grew from 483 million to 491 million.

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Source: Facebook

The main user growth continues to come from Asia, and especially India, where the user base has now reached more than 100 million. Those users, on average, generate less than $1, so it takes nearly five users in India to equal the revenue from one in the U.S.

For its part, Google saw paid clicks surge 26% in the first quarter even with quarterly revenue of more than $15 billion.

How long will user revenue growth last?

The question is whether the average revenue per user, or ARPU, will continue to surge similar to the first-quarter numbers. ARPU jumped from only $1.35 in the prior-year period to reach $2 in the last quarter. Every region saw strong growth, but the 67% growth in the U.S. and Canada region is what drove the advertising revenue surge.

That surge came primarily from placing ads in News Feed, leading to a substantial 116% gain in revenue per ad. In addition, the shift from mobile and away from ads on the right-hand side of desktops led to a 17% decline in ad impressions. Clearly, the company is getting better at delivering ads, but does that increase the likelihood of users staying engaged?

The existing CFO forecast a substantial deceleration in ad revenue growth by the end of the year. The shift in News Feed ads will face tougher comparables as the year goes along.

In the case of Google, the average cost per click decreased approximately 9% over the first quarter of 2013.

Bottom line
Based on the history of Google, a mature product can continue to grow user engagement, but ultimately the monetization of each user will decline. Unfortunately, Facebook is already facing slowing user engagement while monetization plays catch-up. The question is how far monetization can grow before it runs off users -- or at least leads to less user engagement.

Clearly, Facebook hopes that Instagram and Whatsapp will replace the eventual decline in the main traffic source. Whether a social media network can maintain an engaged user base long-term is still unknown. Google has the advantage of obtaining traffic from connecting users to businesses willing to pay for clicks.

Considering that users don't go to Facebook to connect to businesses, it's difficult to forecast a situation where MAUs on Facebook are larger in several years, knowing the history of social networks. That scenario should worry investors, with Google providing the playbook for what ultimately happens to monetization rates.

Mark Holder has no position in any stocks mentioned. The Motley Fool recommends Facebook and Google (C shares). The Motley Fool owns shares of Facebook and Google (C shares). 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.