Facebook's Newest Threat: Justin Bieber?
You read that right, folks. This week, teenage heartthrob Justin Bieber took the lead in providing $1.1 million of seed round funding for Shots Of Me, an upcoming teen social network created by mobile gaming developer RockLive. Details are sparse, but Shots Of Me aims to take on important issues like cyberbullying while addressing the needs of teenagers, which its creators believe have gone largely unmet on other social networks. It's expected that the Shots Of Me app will go live in the Apple App Store later this week.
With a Twitter following of 46.6 million people and counting, Bieber has the power to turn Shots Of Me into an instant hit. Facebook will surely take notice, especially now that it's dealing with potential teenage fallout issues of its own. Last week, Facebook CFO David Ebersman told investors that the social media site experienced a sequential decline in daily usage among younger U.S. teens, which sparked an $18 billion post-earnings sell-off.
A strong disconnect
Investors have been putting a lot of weight behind the old adage that shifts in teenage behavior can unduly determine the fate of a business. This logic would argue that if Shots Of Me can gain a captive audience, it could have ripple effects across the entire social media industry because teens represent the world's next generation of users.
While this may be the case to some degree, investors shouldn't take this as an absolute truth. The fact of the matter is that we've seen mounting evidence of teens' fading enthusiasm for Facebook over the past year, but that hasn't affected its earnings, total engagement, or level of social integration. According to Pew Internet research, most teens still maintain a presence on Facebook despite diversifying their social media use. As Pew put it, "[S]ampling other items at the social media buffet is not the same as swearing off salad forever."
That's the beauty of having nearly 1.2 billion monthly active users: one relatively small demographic shift in usage doesn't necessarily influence overall results. Of course, if teens suddenly fled Facebook en masse, I'd expect its business to feel some pain, considering 94% of teens in the U.S. use the service. But since Facebook's business has thus far held up against the current level of teenage deflection, I'm starting to think the degree of investor concern here is overblown.
Getting ahead of ourselves
For the time being, I don't think Facebook has a looming teenager engagement issue on a scale large enough to negatively impact its overall results. This situation may change in the future with the launch of Shots Of Me and continued deflection to other social networks. However, keep in mind that Instagram usage is growing among teens and remains an important asset for Facebook to gain insights into this fickle-minded demographic.
Let's also not lose sight of the fact that Facebook's user base is much larger and dynamic than just U.S. teenagers. The true power of Facebook is that it's one of the few multigenerational social media networks in the world. Because Facebook has managed to transcend generational barriers, it isn't likely to be something that goes away overnight. Not even Justin Bieber can change that.
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The article Facebook's Newest Threat: Justin Bieber? originally appeared on Fool.com.Fool contributor Steve Heller owns shares of Apple and Facebook. The Motley Fool recommends Apple and Facebook. The Motley Fool owns shares of Apple and Facebook. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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