Too Cool For Facebook

Facebook has been in the news recently, and pretty much all of it has been bad. The company is still reeling from its disastrous IPO, which offered the stock at $38 only to see it plummet to its current (at press time) $27 with accusations swirling that Founder and CEO Mark Zuckerberg knew about that the shares were overpriced and dumped them. Destroying $30 billion in market cap in less than a span of two weeks is pretty tough to do.

And this isn't even the worst news for Facebook. What's more troubling is that there's a growing population which is finding Facebook "uncool", which is pretty much the death knell. While decent, there's nothing extraordinary of the platform itself - what makes Facebook money is advertising revenue, and in order to generate advertising revenue, Facebook needs to (1) have people actively use it and add more personal data and information, (2) get more and more people on the network. Anything that jeopardizes those two factors is a direct risk towards Facebook's revenue model.

According to a recent article in the Los Angeles Times, teens are starting to opt for other social networking platforms such as Tumblr and Twitter. Some of the reasons of the preference range from the other services being more private and intimate, with Tumblr allowing for more post creativity. Both services, in contrast to Facebook, allow for users to use fictional aliases which provide complete anonymity (though in theory, you could create an alias in Facebook, except it would it complicated for people to identify you for connecting purposes - I'm looking at you, Mr. Ethan Levy).

To be fair, the article makes it clear that Facebook is still in pretty good shape. Indeed, it's still the most prominent online community for teens, and from a disposable income perspective, it still has a stranglehold over the most lucrative age segments which are key to its ad revenue.

What I also found interesting is how disgusted some teens are by the prospect of their parents being on the same platform. I can appreciate the fundamental "uncoolness" of having your mom or dad posting things on your wall such as "It's chilly outside, make sure you wear your sweater" or "Don't forget to take the garbage out when you get home" or "My cute little boy! I remember when you were such a funny toddler and used to drink out of the toilet."

Of course, it freaks teens out to know that their parents have ulterior motives in wanting to keep tabs on them. It's the equivalent of the nightmare of having your mother teach at the school that you attend. In reality, Facebook enables privacy controls which allows privacy attributes to be assigned to every individual post, so in theory a teen could make, "I'm just dying for a Smashburger" visible to his parents but make "Who's up for scoring some beer tonight?" visible to a smaller circle of friends.

It could be argued that the preference for Tumblr and Twitter is just laziness around not wanting to configure those privacy controls; that it's simply easier to not live in the same proverbial online universe as your parents do. But I do think the core of it is really a perceived coolness factor which is immediately lost once parents "like" or use something. When it comes to fads and tastes (I'm excluding vices or age-restricted privileges such as drinking alcohol or driving a car), there tends to be a desire for the younger generation to have their own thing, to not simply piggy-back on their father's or grandfather's wave. When membership, not functionality, is what makes a social network great, it's becomes incumbent for companies like Facebook to regain the mojo of their "coolness" factor - and those sorts of challenges are complex.

For me, I'm just going to have to keep playing the cat and mouse game and adapt to the popular social networking sites so I can keep staking my children.