In just 15 years, Facebook has evolved from a dorm room fantasy, to a multibillion dollar marketing engine with 2.2billion active users. However, 2017 may have marked a turning point in the company. With a falling customer count, accusations it fuels fake news, and heightened awareness surrounding the societal consequences of social media, Facebook and other social media giants may find themselves needing to redefine their purpose and their future.

Our observations

  • Since its launch, Facebook has had , being the first network to cross 1 and 2 billion users. Moreover, Facebook and subsidiaries Whatsapp and Instagram took up the top three spots (with snapchat in 5th) for fastest growing social networks between 2015-2017, each growing by over 400million users. Twitter was the 6th fastest grower with just 23million new users.
  • Q4 of 2017, Facebook reported 50million fewer hours per day on Facebook (Approx 5% decline) in addition to a drop from 185 to 184million daily-active users in the North America region. Moreover, Facebook has been experiencing a long term decline in the amount of original posts.
  • Facebook’s falling popularity amongst the young generation has been falling for a long time. Between 2011-2014 the amount of 11-17 year olds fell by 25%. Attempts to reverse this pattern have largely failed, the most recent being ‘Lifestage’ which was shut down due to lack of popularity, and safety concern young people.
  • Facebook is facing a difficult time for public relations, with the filter bubble and fake news amongst others reducing public trust in the company.
  • On the other hand, Facebook is experiencing success with older generations, the 55+ bracket being its fastest growing market. Moreover, Facebook saw a rise in both revenues and profits by 48% and 20% respectively between Jan 2017 and Jan 2018.

Connecting the dots

The term context collapse describes the circumstance in which a network is so large, that no one wants to say anything, because the audience is too large and varied. On the scale of Facebook with its 2billion users spanning every generation, this means that fewer people actually post or share things. Truly a consequence of its success, this phenomenon has resulted in Facebook becoming increasingly less of a social media platform, and more of a news outlet – video sharing platform, with original content posts falling by as much as 21% per year since 2014.
However, this issue is becoming a problem for social media at large, as companies such as Instagram and Twitter attract hundreds of millions of users they too are presented with the issue of overcoming the context collapse.
Data suggests that two solutions have evolved. For young people, the first reaction was to migrate to different platforms that other generations hadn’t inhabited yet such as Instagram and Snapchat in an attempt to create a distance. This is an interesting trend, as it would suggest that social media could follow a cyclical trend in the future, whereby each new generation will demand a new platform on which to express themselves and overcome generational issues of the context collapse.
Alternatively, instant messaging apps offer the opportunity to bypass the context collapse altogether by providing a much more personal environment, allowing you to choose who you send messages to, and tailoring specific groups. This can be seen in the rising popularity of WhatsApp, Facebook Messenger, and

WeChat, as well as Snapchat. In all of these apps you can easily share material with specific audiences, individuals, or a tailored network of people. These more personal platforms could be a much more sustainable option than the first, and many have already become very popular, as seen by four of them being amongst the 10 largest social media platforms in the world today. As such, it is very possible that a middle ground between Facebook and instant messaging could emerge in the future. Another issue for social media is increased regulation. Following a major tech backlash at the concept of the filter bubble, and accusations of social media propagating fake news, regulators are hitting back at big data companies such as Facebook and Google. The European General Data Protection Regulation (GDPR), for example, will allow governments to impose enormous fines on companies for data and privacy violations.
All this could mean the end of a ‘golden age’ of social media characterised by questionable privacy agreements, and heavy monetisation of users. The first signs of this already coming into effect as Facebook begins clamping down on fake news, and aims to make friends the focus of the news feed once again both of which may negatively impact the company’s finances. Moreover, Facebook CEO Sheryl Sandberg announced major privacy changes in light of the GDPR which will apply to all of Facebook’s subsidiaries and platforms.


  • Increasing regulation to protect user privacy, and promote fair competition will be one of the major obstacles to the growth of giants such as Facebook and would create a window for competition.
  • As privacy law develops and people become increasingly aware of data packaging, it opens the window for a decentralised potentially blockchain based competitor to enter the market. Examples are Matchpool, Social, and Steemit which already exist.
  • We are likely to see a rise in user based, organic content once again, with a greater division between user’s posts and corporate interests on platforms.