Five signs we have reached peak Facebook

If Facebook’s most valuable users start to sign off, that creates a brilliant market opportunity for its rivals

In the past week, 9 per cent of Facebook’s American users may have cancelled their accounts over privacy concerns, according to a survey by Creative Strategies. Apparently, 17 per cent have deleted their Facebook app from their phone, 11 per cent from other devices, and the 9 per cent have cancelled altogether.

We should wait until we get proper data from the company itself, but the episode raises the possibility that we have hit Peak Facebook. In other words, have we reached the point that social media fragments cease to play an ever more prominent part in our lives?

So what are the things to look for that will give a feeling for the future shape of social media? Here are my five.

Obviously we need to know what is happening to the Facebook numbers. The crude statistics are stunning and will remain so: to sign up 2.2 billion accounts when the world’s population is some 7.5 billion is extraordinary. But don’t look at the headline numbers; look at the national Facebook breakdown. Some users, mostly in the US but also in Western Europe, are hugely profitable. They are the people whom the advertisers really want to reach. I guess that three-quarters of Facebook’s profits come from fewer than 10 per cent of its accounts. If US, UK and other European accounts fall, or even stagnate, this will be the signal that peak Facebook has indeed been reached. And this can happen even if the overall number of users continues to rise, as I rather expect they will.

Next, what happens to the other platforms? Social media is so new that the rules and etiquettes have still to evolve. Except perhaps those controlled by Facebook, other platforms are likely to develop different rules of engagement. If Facebook’s most valuable users start to sign off, that creates a brilliant market opportunity for its rivals. There is, I suspect, room in the market for a posher version of Facebook (and LinkedIn) that would pick up this business. Remember, Facebook started at Harvard University, and you can’t get more upmarket than that.

Third, when does the shift to online retailing peter out? If online retailing stops growing or simply grows much more slowly than in the past, the value of social media advertising wanes. It is a parallel trend to the rise of social media but one that is closely integrated with it.

Fourth, what is Jack Ma doing? He has called on Mark Zuckerberg to “fix” the privacy issues of Facebook, but I’m more intrigued by what he does, not what he says. And what he is doing with the Ant Financial Services Group, the Hangzhou-based fintech company that he has spun out of Alibaba, may give us all a clue to the new direction of this space. If Ant goes public later this year, it could have a valuation of more than $100bn, which could turn out to be larger than Goldman Sachs or its direct rival PayPal.

Finally, don’t write off conventional media, but watch how it fights back. It is inherently strange that people say they value content, but the high-tech giants have until recently originated very little of it. It would not damage the giants much if conventional media becomes a more effective challenger (as I think it will). But it would signal some sort of turning point in the battle for thoughtful people’s space of mind.