by Victor Karamalis
Yesterday (10-Oct 07), Om Malik of GigaOm showed an interesting graphic of Facebook’s traffic dropping using Comscore’s information for the first time since February 2007 as shown here on Compete.com. Although this may be too premature to say that all those Facebooks API’s have lost traction, there could be a bunch of factors involved. So, before everyone stops to make Facebook Apps and jump over to other social networks, let us see if it is just an off month with some plausible explanations.
First of all, Facebook has been the social network of choice for most undergraduate students. They have just started the school year. In addition, people that have been away from work for the month of August had to play catch up in the office in September. Also, Compete‘s numbers only focus on unique visitors from the United States. This may be the case as well for Comscore’s Media Metrix Service. As of this post, information concerning Comscore’s metrics could not be obtained. Global traffic needs to be taken into consideration (just like global markets in the financial space).
Let’s just make the most obvious point. This has only been for one month. Although Om’s popped out that spreadsheet from his Fedora seems scary for Facebook with more than a nine percent decline (he will contact FB tomorrow on this if it’s true), the primary concern for Facebook is if the bottom line has been affected. This includes any large multi million dollar advertising deals with the likes of Microsoft as reported over the summer that are in the pipeline. Continued traffic decline could hurt future deals like this and potentially jeopardize its multi-billion dollar IPO valuation a few notches down. On the other hand, ambitious Facebook application developers still have over 24 million users to target. But, it is just too soon to get this feeling of panic.