As Snapchat makes 20pc of staff redundant, it’s clear the social media boom is well and truly bust
OSCAR WILLIAMS-GRUT
ASSISTANT BUSINESS EDITOR
There’re a couple of billion people on Facebook. That’s more than have used the services of any single company ever before. TikTok is closing in on what is it? A billion users? WhaysApp is a billion again isn’t it?
This is bust?
Possibly the peak of a wave, could be competition shaking out the suppliers and all that. But bust?
Jeez.
There are two things going on here:-
1) Snap have never made a profit. And will struggle because you don’t get the info to target people in the same way that FB does.
2) Apple’s anti-ad tracking has destroyed a whole lot of ad revenue for apps (but not Apple ads)
Isn’t this the usual Peak [something] anyone with half an opinion and a media outlet is jabbering about since forever?
There’re a couple of billion people on Facebook.
Really? I doubt it. Maybe that many accounts have been opened. But how many are used?
It’s like the market penetration of much of social media. Sure Whatsapp’s become ubiquitous. It’s a useful messaging app & network effect. But the rest of them? There’s a very noisy user base. Twatter’s a good example of that. But how many regular Twats are there? SM seems to have become a phase kids go through. But with limited purchasing power, so difficult to moneterise. Those accounts will still be hanging around for years. The majority of people don’t have the time or the interest.
Still don’t know how WhatsApp makes money. I’ve never seen an ad on it. Tried to look it up but its clear as mud. It seems that they used to have a premium service that users could pay for but they stopped it. That leaves only charging corporate clients, no idea what extras they get for that, but bloody amazing that it covers the free Call, conference,image and texts for a billion other users.
Whatsapp has no monetised output – neither fee nor ads. You’re right. I once talked to Facebook and they say they have some 200 engineers working on it. So, in our GDP figures we see those costs – the 200 engineers. And we have nothing for the value of the output – it’s non-monetised. So, one billion people get all or some of their telecoms through Whatsapp. The switch from other telecoms to this shows up as a reduction in GDP. The specific WhatsApp input/output figures show up as a reduction in productivity (more labour being used, no more output, fall in productivity).
And yet 1 billion are getting free telecoms.
So, we have a measurement problem. Which leads to two things. At least some part of the supposed slowdown in GDP growth is here, just because we’re not counting it. Secondly, there are fools out there who think we’ve got the information to be able to plan the economy…..
“we have a measurement problem”: not to worry, I don’t believe economic statistics anyway.
I have a Facebook account but only because family members use it and use Messenger. I never read or post anything on Facebook but Messenger is useful.
@Tim The telecoms companies aren’t losing out on Whatsapp..
You still need access to the internet for it to work, and guess what the telecoms companies are selling…
Given that Whatsapp’s data transfer is simply a drop in the oceans of cat pictures and pr0n it’s merely a blip in the traffic that is there anyway, and people who have the illusion that it’s “free” don’t use the minutes/sms their mobile bundles usually come with…
And, of course, the heavy users go over their data allowance, so…. ka-ching!!
Wouldn’t surprise me at all if Whatsapp is simply treated as a corporate loss leader.
And, as with all things Social… the users are the Product. Whatsapp needs needs your mobile number to work.. The one thing you usually don’t give to other Social Sites..
Between FB and Whatsapp Meta has the full picture on virtually any average user that uses both..
And that’s where the real money is for them..
Grikath,
“You still need access to the internet for it to work, and guess what the telecoms companies are selling…”
True, but it’s not very much. It’s a dump IP pipe. What the telcos wanted were value added services. Like £1/minute video calling, or £5 to watch some porn. It’s why they paid so much money for those 4G licenses under Brown, because they thought they were going to collect bigly, when what actually happened was that applications appeared that just laid video on their dumb IP pipe.
“Like £1/minute video calling, or £5 to watch some porn.”
Which was already stupid at the time, given how Android, and thus the loss of control over what phones could and could not do, was already alive and kicking..
As was Whatsapp, and…. and….
And then you’re not even looking at the insane pace of development mobile hard- and software were going through at the time. ( and to an extent still are now..)
And in fighting Whatsapp et.al. at the time they only made more clear how much they expected to stiff us for..
Was fun reading at the time.. 🙂
BoM4,
That was the 3G licence auction which was deliberately set up to generate max revenue for Brown, but it back fired because the huge amounts meant roll out was delayed and we went from being mobile network pioneers to also rans.
Because of that the 4G auction and all other spectrum auctions were structured to get fair value value and encourage maximum usage and innovation. Most being technology neutral.
As to services, prior to the 3G auctions a lot, and I mean a a lot, of very expensive management consultant man hours were spent trying to identify mobile data services and how they could be monetised. Lots of models of services like tele medicine, video calls etc. As you identify, in the end the Internet turned out to be the killer app and the MNOs have gone from being huge money spinners to basic infrastructure providers.
BiND,
Ah yes, 3G not 4G.
And I remember the push for video calls even though the networks, quality of screens weren’t up to the job.