How Facebook can bank on, well, Facebook
I am part of a unique crop of Facebook users – the first class to widely use Facebook for all four years of college. Mark Zuckerberg built the service during his sophomore year at Harvard, so even his class didn't know what it was like to enter college in a world where Facebook exists.
In the early days (circa 2004 - 2005) the ticket for admission was an ".edu" email address from the right school, because the service was only open to college students, and in its earliest incarnation access was doled out one school at a time. Recently a friend recalled how excited and impatient she was to get her .edu address so she could sign up, and how jealous she was of friends who had attended their freshman orientation sessions before her, because they got their accounts first. I've heard that same story many times from many others.
When you got the keys to the site, you had access to an entirely different world. In my day (oh, God, I'm beginning to sound like my father...) it would have been unimaginable to navigate college life in the mid-to-late aughts without it. My resident advisor introduced herself to me via Facebook before I moved in. After meeting someone interesting at a party, immediately adding them as a friend on Facebook was not only acceptable, but common. It was a cool, exclusive club. It felt like something didn't happen unless you Facebook-ed it. Then it became more real somehow.
Now the entire world is on Facebook. That's only a slight exaggeration. There are almost 7 billion people on the planet, and 1/7th of them are on Facebook. Your mom is on it. So is your screwy uncle and his friend and his friend. This 105-year-old woman is on it (awesome, but not the point). It's a bit like the problem Apple is beginning to have. After six iterations of the iPhone – including the 4S – how hip can it be? Facebook is just lucky it doesn't have serious direct competitors like Google and Samsung.
The problem is that users and developers are getting bored. The company needs to get users re-energized. That's part of the reason Facebook redesigned its News Feed last week. The company won't solve it advertising problem if it can't count on engaged users. An oft-cited Pew report says that more than half of the social network's population have taken breaks from the site for at least some amount of time. Developers on Facebook’s Platform are also planning for the worst. They are creating their own graphs based on data they’ve culled from Facebook over the years, because they are starting to think their own users' connections are more relevant than the one's on Facebook's social graph. And these third-party developers have long been a part of Facebook's strategy to colonize the Web. Cumulatively, these kinds of things invariably affect its perception and stock price.
Of course, not being cool anymore doesn't mean that Facebook is going to keel over. iPhone sales aren't suffering all that much either, despite Samsung's age-ist ad onslaught. Facebook is in its first year as a public company and has a billion users. Besides Google, how many other companies can claim that a billion people use their products? But now that the social network has roped in that much of the world's population, it can't bank on user growth to keep it exciting – at least not in the eyes of investors. Cool can't come from exclusivity, anymore, or even utility. It must come from somewhere else.
One thing Facebook hasn't done a lot of yet is bank on its brand. And those terrible "Facebook is like..." videos do not count. Perhaps that's because it might be a faux pas for such a young company. But Facebook is not like any other young company. The most successful brands establish personal relationships with their customers. But because of the very purpose of Facebook's product, its users have a more visceral, personal cling to it. And for it's earlier users, the hold is even tighter because its associated with a particularly formative and romanticized period of their lives.
Facebook is no Coke or McDonalds in terms of branding, but it is already at a stage where it has its blue-white fingerprints on our frontal lobes. The company has a lot of work to do if it will keep its billion users engaged, and it can't be explained away as a marketing issue. Finding a way to celebrate itself and tap into its users' emotional connection to it can help curb some of the jadedness being flung at it. To be clear, innovating the product is priority number one. But while the company is figuring out just how the heck it is going to do that, banking on our nostalgia for the brand can certainly help.