Read on Twitter
Facebook had 2.5bn monthly users in Q4 2019. 74.3% (1.86bn people) users are from Asia-Pacific, L. America, MENA & SSA. Yet only 28% of Facebook's $70.7bn revenue in 2019 came from these regions.
But a majority of Facebook's revenue came from the 642mn users in North America. https://twitter.com/Zennyharry/status/1341638103564513280
But a majority of Facebook's revenue came from the 642mn users in North America. https://twitter.com/Zennyharry/status/1341638103564513280
On average, Facebook earned more than $35 from each user in North America in 2019. But it earned around $2.7 for each user from Asia-Pacific, Latin America, Middle East & Africa combined; 1.86bn people!
The point is Facebook needs to remain strong in North America & Europe. Else.
The point is Facebook needs to remain strong in North America & Europe. Else.
Meanwhile, Facebook is growing slowly in these developed regions. Between Q4 2017 & Q4 2019, it added just 9mn users in North America, but gained 300mn+ users in Asia-Pacific & "Rest of World".
This slow growth is a concern for a few reasons.
This slow growth is a concern for a few reasons.
1. It needs to continue getting people's attention. Facebook is in the attention economy. Its competition is not just another social media, it's Netflix, Zoom, YouTube, Amazon, Spotify, LinkedIn, Snapchat, etc. That's why it is copying features from all of them. But for how long?
Facebook is basically battling to remain "cool"/in vogue in its most important markets (developed countries). Remember that failure to keep up trends and retain users was what allowed Facebook to leapfrog its former competitors like MySpace.
So it's valid concern.
So it's valid concern.
2. Facebook's largest number of users are in countries where advertising is not lucrative. It has 1.8bn "low-value users". This is a weakness that forces it to overconcentrate on NA & Europe while hoping that someday Africa & the others will start making higher revenue.
In the past, we've seen Google shutdown Orkut because it was no longer popular in the US despite high adoption in India and Brazil.
Low ads revenue is why Facebook is less keen to push ads on WhatsApp, which is predominantly used outside the NA. Its focus is now on commerce.
Low ads revenue is why Facebook is less keen to push ads on WhatsApp, which is predominantly used outside the NA. Its focus is now on commerce.
I don't know about other people, but for me, these are the things that come to my mind when I think about the future of Facebook. It needs to see significant revenue growth outside NA & Europe, else it will remain vulnerable to the "attention competition" in the US.
