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Social networking may be the most notable phenomenon in internet history. Few trends have grown as fast and gone as a far, and it has in many ways fundamentally altered the way hundreds of millions of people use the internet.

But have popular social networks like Facebook tapped out most of their growth potential? According to a new eMarketer report, the answer may be yes.

Currently, just under 64% of the internet users in the United States use social networks. By 2013, that number will increase to 67%. That's growth, but it's not the double-digit growth we've become accustomed to seeing.

The slower growth is due to a simple fact: so many are already using social networks. This year, eMarketer estimates that "over four out of five 12- to- 34-year-old online users will be regular social network users." In the 18-24 age range, some 90% of internet users will get their social network on. And social networks have significant penetration amongst older adults as well; over half of internet users 45-64 will use a social network in 2011.

Clearly, social networking's reach is formidable. But the already-impressive reach also means that there are fewer and fewer internet users yet to be convinced to sign up. And, given how long social networking sites like Facebook have been around, it's logical that at least some of these users will never be persuaded to sign up, for a variety of reasons.

According to Debra Aho Williamson, this means one thing: "with fewer new users signing up, social network users will be more sophisticated and discerning about the people and brands they want to engage with." And social networks themselves will have to work harder to maintain loyalty, "particularly [with] people ages 35 and older." As Williamson sees it, this creates plenty of opportunities for marketers and publishers:

Marketers and media companies can contribute to this effort by creating compelling user experiences that make people want to stay connected to social networks so they can gain access to experiences, deals or content they may not be able to find anywhere else.

From movies to commerce, it's clear that more and more media and marketing will find its way onto the social network. But is that going to boost social networks, or could it hurt them?

In many ways, social networks are growing more and more impersonal by the day. Instead of serving as platforms for interacting with other people, social networks are increasingly serving as platforms for interacting with brands, businesses and entertainment.

When it comes to the world's most popular social network, some believe Facebook is starting to look an awful lot like AOL reincarnated. Perhaps being able to watch movies, buy flowers and play games in a single place will eventually lure those who haven't yet been attracted to the social networking experience, but the more 'crowded' and 'cluttered' social networks become, and the more they try to be all things to all people, the more they risk driving their most loyal and valuable users away.

From this perspective, the question may not be "How much bigger can social networks get?" but rather, "How much bigger should they want to get?" Now that growth is slowing, perhaps companies like Facebook will take the time to consider this question.

Patricio Robles

Published 21 March, 2011 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

2429 more posts from this author

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Nick Stamoulis

As the number of new users plateaus, social networking sites are going to be able to comb through user data and find out exactly how their sites are being used. Hopefully this data will show social networks what they need to do to keep current users happy and engaged. Businesses will also be able to more effectively target users as their target market settles in growth.

over 5 years ago

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Lee Grasby, Banana Kick

There's still a long way to go yet. People are just getting used to the idea. Early adopters may have the biggest share of voice but the masses (or late adopters) i.e. the biggest consumer audience will ultimately become lead by new features. It's about same platform, greater innovation or user experience & encouraging that usage.

over 5 years ago

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Anthony Green

Patricio, I definitely agree that social media users are going to be more sophisticated, which is both a bane and a boon to small business owners depending on what they're trying to accomplish. "Black hat" social media is already pretty much dead, whereas black hat SEO is still alive and well - people don't want their social media experiences screwed with, which promotes a more honest and straightforward platform for marketing. I read that logo-based brands do about 1/18th as well as individuals at promoting themselves through social media - any thoughts on that? Just wrote an article on the subject, which is why your article really caught my attention. I think social media will reward those who use their own personal brand to promote their company's, but I'd love to hear your thoughts on this.

over 5 years ago

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Hans Henrik H. Heming

The hole discussion about how many uses social networks is misleading. The more interesting part has to be about how we use the different networks. In that respect we are just started. In a business perspectice we still need to see HOW we monetize the best way......

All the Best
Hans

over 5 years ago

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mbt

As the number of new users plateaus, social networking sites are going to be able to comb through user data and find out exactly how their sites are being used

over 5 years ago

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Lisa Duddington

Although this article talks about growth, what i'd be very interested in knowing is how often and for how long people are now using social nets like Facebook. What i've observed from my own contacts on Facebook is a clear cycle:

1. User joins Facebook. They fill out all their profile data and are very active, posting lots of updates and commenting and liking lots.

2. A few months later. Their status updates are more thought through and there are less menial posts as they realise it's not cool to post every single thing you're doing. Their profile info stops being updated. Unflattering photos are untagged and they are much more conscious about how they are perceived.

3. Up to a year later. Posts are very infrequent though they still check Facebook to see what their friends are up to. They tend to observe more than contribute.

To me, it's clear from talking to people that Facebook just is not cool anymore and people are eager for 'the next thing'. Let's face it when your parents join then it just loses all credibility! Social networks will always be around so long as we are social animals and i'm sure we'll see many come and go over the years as it's the natural cycle. Nothing can stay cool forever.

over 5 years ago

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Firewall Implementation

Nice job Patricio I think our live never be the same without these social sites.

over 5 years ago

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Mark Rogers, CEO at Market Sentinel

Facebook has achieved scale as a network, and that means it can't tell much of a story about growth in developed markets. The question is: can it get value from its users?

How will Facebook derive enough revenue from its users to earn its recent stock valuations? Well, that's the big question. Facebook advertising shows some promise but it's far from clear what the financial value of a "fan" is. My hunch is that Facebook's big value comes from insights based on collaborative filtering (people who like X also like Y). Unfortunatley since the F8 update last year, this data is inaccessible to brands.

Facebook's challenge will be to find ways to get value out of this type of user information without compromising user privacy. If they can do this, their financial future will be secure - regardless of how much media marketing is on the site. At this point, Facebook's size and breadth of content depends less on room for growth and more on FB's understanding of its user base.

over 5 years ago

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Monica

Interesting post and something for writers like me to be happy about.
The increase in sophisticated social media users will drive demand for quality content and genuine, personal brand engagement. Hopefully it will also further humanize the marketing process, with a move towards organic conversation vs advertising. However, for these conversations to exist, the platform needs to compel them, and social network "clutter" certainly threatens that. This is why blog comments and forums continue to be a popular way for people to interact. And this need for niche conversation in a simple interface will only grow the more complicated social networks get.

over 5 years ago

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Giorgio Burlini, Director at Oxford Learning Lab

If Facebook cannot be a vehicle to sell things to people, what else can they be to make money?

To make no (enough) money and be fed by VC could be "cool" for a start up, but not for a grown up in search of an IPO.

And with subscribers unwilling to pay a fee for a service like FB they will see more and more ways to squeeze money from any action they take there.

Some people will leave, most will stay and form the real cash cow, even if they are "uncool"...

over 5 years ago

Carlton Jefferis

Carlton Jefferis, CEO & Founder at Gettus!

Highly thought-provoking post (at least for me!), thanks Patricio.

As someone who worked for a major online service back in the heady days of the dotcom era, that last paragraph really struck a chord. It's amazing how we've come full circle; from closed proprietary platforms (think AOL and CompuServe), to an open source environment (web, HTML, Java) and now back to a closed proprietary platform (FBML and APIs).

The value for FB is no longer in the number of users (valuable as it is), it's now all in the data. They've been clever to ring-fence the bulk of this rather than share it with advertisers, brands, analysts and so on. It irritates the hell out of most who try to use FB for commercial gain, such as Page owners, because they're used to having access to full-featured analytics and measurements tools like GA, Omniture, MVT tools etc where they can track, monitor, test and change everything in a nanosecond.

Along the lines of Mark Rogers' comment, I would bet the ranch that FB are busy beavering away on killer analytics tools that will help them tap the real value. But they'll still keep the really juicy stuff for themselves. I reckon that's what Goldman Sachs and their merry little bunch have invested in. I can't wait to find out.

Interesting times, to say the least!

over 5 years ago

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Caroline

I think I may be getting even more confused.

over 5 years ago

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