Are we reaching “peak facebook”?Or how to apply the “peak oil”

theory to social networks.

Peak Oil Theory

Peak oil is the point in time when the maximum rate of global petroleum extraction is reached, after which the rate of production enters terminal decline. This concept is based on the observed production rates of individual oil wells, and the combined production rate of a field of related oil wells.

http://en.wikipedia.org/wiki/Peak_oil

2011 2012 20142013 2015 2016

skype

healthy growth (sub 25)

unhealthy growth (moms)

suicidal growth (grandmoms)

The 5 Social Networks Comandments:1. Thou shall not be in more than one major Social network at the same time (facebook and hi5

and keep both updated). 2. No matter how many feeds and automatisms, one will allways have a SN that is consired

home.3. Trend setters will allways define where people are - and trend setters are allways sub25 or

circa that age.4. At some point (after 4-5 years from starting sizeable growth) social networks stop being cool

due to i) internal demographics, ii) cooler competition (facebook vs hi5).5. Skype is different because it’s not a social network, and will continue to grow almost linearly

due to pure network externalities but will never become a major service like phone.

By late 2013 FB will begin to colapse.

Future

Scenario #1 - death of facebook due to: “cooler competition”

Pro:• Facebook is the first true SN with global reach – the only

countries where it does not lead are China (QQ), Pakistan(...) and Brazil (Orkut).• Facebook proved that national flauvored SNs, even when

bundled with a wealth of local content could not face better UX, and growth dynamics (e.g. Poland, Brazil, Portugal, only went “blue” in 2010).• The next FB must also have global reach... And will not

develop on a national agenda (think of Vietnam).

Scenario #1 - death of facebook due to: “cooler competition” (Portuguese case)

Hi5.com (2M) user base:• Very young;• Very compact;

facebook.com (3M) user base:• Older (and older)• Diverse

Scenario #1 - death of facebook due to: “cooler competition” (Portuguese hi5.com case)

At the end of 2010, Facebook has around 3M users from Portugal.

People started abondoning hi5 because of FB growth.

By the end 2011, hi5.com should be defunct.

2011

At the end of 2008, hi5.com peaked with around 2M users from Portugal.

early adopters growth decline

“chungas” from hi5.com will degrade facebook

Scenario #1 - death of facebook due to: “cooler competition” (Portuguese hi5.com case)

Hi5.com•2005-2006: early adopters - trend setters (20-25

year old range) responsible for hi5.com popularity•2006-2008: growth years – the demographics of

the hi5.com went down to the 10-24 year old range.•2008-2010: declining years - hi5.com stopped

being cool to the older demographics, and as they stopped using hi5.com, as FB came as substitute.

Facebook Mobile – Feature Set

Feature Present

Converged Address Book No (FB Address Book)

VoIP No

IM Yes

Mail (POP, IMAP) No

SMS/MMS No

Music Lib No

Video Lib No

App Lib No

Games No

Conclusion

• Facebook will increasingly move into the realm of the communication tools (VoIP, Video, IM, SMS, etc);

• The facebook is the computer paradigm will probably be more like “the facebook is the mobile”.

• Growth dynamics of communication tools like Skype, or MSN Messenger are different from SNs;