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Why is Facebook's Growth Stagnating?

The guessing games have begun over the news that Facebook's growth stagnated in June - with privacy fears, market saturation and the dwindling popularity of social games fingered as the culprits.

After growing by 7.8 million new active U.S. users in May, Facebook added only 320,800 new users last month. Total number of active U.S. users now stands at 125,000,000, Facebook claims.


Inside Facebook Gold is taking the position that U.S. market is out of emerging growth mode for social media. June's growth was just 0.3%, following growth in May of 6.7%. Facebook has seen an average of about 3% to 4% monthly growth over the last year, Inside Facebook founder Justin Smith says.

Privacy Issues?

Privacy could be an issue as well. The company's promises on privacy - broken repeatedly - are wearing thin with consumers, says Marc Rotenberg, executive director of Electronic Privacy Information Center (via TechNewsWorld). "The problem is, we have gone through this before — what Mark [promises today] is similar to what he said a year ago."

Dying Games

Another theory is that social gaming is tapering off, writes CNET,  which points out that, though certain games like FarmVille and Pet Society have proven addictive, they could turn out to be fads. Some games are also building a presence off Facebook, which could be siphoning traffic.

Too Soon

Bottom line, analysts say, the numbers are too early to be analyzed because a month's data is not enough to give insight into a pattern, according to the San Francisco Chronicle.  The decline could be the result of a seasonal issue, as people tend to travel or get married in the summer, which keeps them from their computers, says Gartner analyst Ray Valdes.


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