Facebook’s user base growth has been staggering. Not many companies on earth can boast of a user base that kept growing at double digit rates for more than ten years in a row.
One can argue that strong user growth is a by-product of the segment in which operates, social media, but Facebook was not the first social media company to enter into our world, nor is it the only social media company in operation today.
Despite growing its user base from zero in 2004 to more than 1.78 billion during the recent quarter, Facebook’s double-digit user growth rate is far from running out of steam, which is a huge achievement by any standards.
To put things in perspective, Facebook reached 1.23 billion monthly active users during the fourth quarter of 2013. Facebook has reported eleven quarterly results after that, and the lowest level of monthly active user base growth (year-over-year) the company reported during that period was 12.93%.
The result is, despite growing in size, Facebook has gone from reporting 165 million net additions year-over-year per quarter during early 2015, to nearly 250 million during the most recent quarter. The last time Facebook added more than 240 million users was way back in Q3-2011, when user base grew from 550 million in Q3-2010 to 800 million in Q3-2011.
(Editor’s Note: It can get a little confusing if you’re not familiar with how financial data is expressed, but year-over-year quarterly numbers represent the growth reported during a particular quarter, but does not represent the growth for that quarter alone; rather, it is reported in comparison with the corresponding number from the same quarter of the previous year. For example, Facebook had 550 million users as of the third quarter of 2010. Over the next one year (four quarters) they added 250 million users to ultimately reach 800 million users. Therefore, in the third quarter of 2011 (that’s a year later) they’d be reporting a net addition of 250 million users year-over-year. That doesn’t mean they added 250 million users in one quarter; it means they added 250 million users since the same quarter of the previous fiscal year.)
The Current Challenge for User Growth
Facebook is now fully leveraging its scale and size thanks to the network effect. Of the 242 million net additions for Q3-2016, APAC brought in 107 million users; Rest of the World 95 million; Europe 27 million; and North America 12 million.
As you can see, developed markets consisting of Europe and North America only brought in an additional 39 million uses, which means 203 million of the 242 million net additions were from emerging markets.
This trend will continue for the foreseeable future because Facebook is entirely reliant on Internet penetration, and the penetration in APAC and Rest of the World lags that of developed markets.
As smartphone penetration and the Internet’s reach increases in these regions, the potential market for Facebook widens, bringing in more users for the network. But even there the growth cannot go on forever. Europe and North America are already growing in the five to ten percent range and, at some point, APAC and the Rest of the World will necessarily follow suit.
So user base is definitely going to slow down, but not right now. As millions of potential Facebook users gain access to the Internet and to smartphones, their market keeps getting bigger. As such, they won’t have to worry about user growth for quite a few more years.
Read this related article: Everybody Thinks Facebook Growth is in Deep Trouble. What is the Real Truth?
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