For years, Facebook ruled over social media, but it has sunk in popularity in this day and age — something that both Wall Street and Gen Z youth agree on.
The New York Times reported that Facebook’s parent company, Meta, has seen a decline due to four main reasons: it’s unappealing to the younger crowd, less innovative since it first began, focuses too much on the metaverse and is facing federal regulators when it comes to new acquisitions.
Is Facebook for older people?
The first problem is the most obvious one. Youth don’t use social media in mainstream ways anymore. Many prefer to use different apps for different purposes: Discord fulfills the need for private chat groups, Twitch hosts live-streaming and games, BeReal is for spontaneous photo sharing and TikTok has become the ultimate content hub, writes Axios’ Sarah Fischer.
None of the listed apps include Meta’s Instagram, Facebook, Messenger and WhatsApp.
A Pew Research Center Survey from 2015 found that 71% of teens between the age of 13 and 17 used Facebook, which outperformed Instagram, Snapchat and Twitter within the demographic.
But in 2022, the percentage of teen Facebook users dropped to 32%, Pew recently found, per NBC News.
Is Facebook copying TikTok?
This brings up Facebook’s second issue. Seeing TikTok’s success with its video-based content, Meta decided to use the same strategy and divert its focus to Instagram Reels.
The photo-sharing app changed and users were quick to notice.
Big Instagram accounts like that of Kylie Jenner’s, with 361 million followers, shared a petition to “Make Instagram Instagram again.” It has over 300,000 signatures as of Aug. 22.
“Most of its biggest hits — not just two of its main products, Instagram and WhatsApp, but many of its most-used features, like Instagram Stories — were invented elsewhere. They made their way to Facebook either through acquisitions or, when that didn’t work, outright copying,” wrote Farhad Manjoo for The New York Times earlier this year.
How Facebook deals with competitors
As of late, though, Meta is going full force to create the metaverse, innovation with a niche market — the third problem.
Horizon Worlds, an app created by Meta, become available in more countries last week. CEO Mark Zuckerberg posted a selfie of his in-game avatar. The internet deemed the graphics comparable to a children’s game, like Roblox.
According to The Verge, the company said it was going to spend at least $10 billion on the meta division last year, with more investments in the next few years.
Federal regulators are tracking Facebook’s expansions
In the past, Facebook was able to buy its way out of competition, as it did with Instagram, and even tried to buy Snapchat. But the company’s growing dominance has attracted more regulation towards it.
In July, the Federal Trade Commission filed a suit to block Meta from buying the maker of a virtual reality fitness app, Supernatural, coming in the way of Zuckerberg’s vision of the metaverse and marking anti-trust action from regulators.
What’s the future of Facebook?
Wall Street appears to be backing off, with the stock falling over 50% in the past year, per The New York Times. But that doesn’t mean Facebook isn’t one of the most powerful companies in the world right now.
It has influenced everything from politics to the pandemic response deployed by different governments and made roughly $117 billion in revenue last year alone — and the company has not shown any signs of slowing down.