Peter Kafka

Recent Posts by Peter Kafka

Cheer Up, Facebook Investors! Maybe People Aren’t Bailing on Mark Zuckerberg, After All.

Close to a year after its IPO, Facebook is still trying to figure out its ad business. But none of that will matter if users don’t stick around.

You can find plenty of anecdotes about people who have bailed on the social network, or are at least spending a lot less time there, sometimes because they’re using rivals like Twitter, WhatsApp or Snapchat, and sometimes because they’re doing other stuff, period. And that thinking must have resonance inside Facebook, too — otherwise it wouldn’t be trying to roll out a Facebook phone.

But J.P. Morgan analyst Doug Anmuth thinks those concerns are overblown. In a note this morning, he uses his own data and comScore’s to make two conclusions:

1) Facebook users are spending much less time with the service on the PC. But they’re spending much more time on Facebook on the phone, so overall engagement is up.

Facebook desktop v mobile JPM

2) Facebook’s mobile competitors — including Twitter, Snapchat, WhatsApp and Instagram* — have seen a lot of growth in the last year. But Facebook has seen more. 

FB mobile v. competitors JPM

(You can see a full breakdown of the data set at the bottom of this post.)

And Anmuth figures all of that means that even as Facebook plays around with different ad tactics and strategies, the overall trend is still moving up and to the right. He predicts the service will end this year with $5.5 billion in ad revenue, up 30 percent, and that it will do $6.9 billion in 2014.

If you want to poke holes in Anmuth’s argument, you could note that his data doesn’t break out usage by demographics. Which means it doesn’t address what ought to be the most worrisome of the people-bailing-on-Facebook stories — that teens and preteens are either quitting the service or not signing up at all. If those stories are true, though, we’ll see it show up in the numbers eventually.

*Obviously, Instagram is now a Facebook asset, but for the purposes of the study, Anmuth treats them as a competitor — which makes sense, since right now time spent on Instagram versus Facebook is a revenue hit for Facebook.

FB v. mobile table JPM

Latest Video

View all videos »

Search »

Nobody was excited about paying top dollar for a movie about WikiLeaks. A film about the origins of would have done better.

— Gitesh Pandya of comments on the dreadful opening weekend box office numbers for “The Fifth Estate.”