Facebook shares slide as user growth in question

SAN FRANCISCO Tue Jul 17, 2012 4:59pm EDT

The sun rises behind the entrance sign to Facebook headquarters in Menlo Park before the company's IPO launch, May 18, 2012. REUTERS/Beck Diefenbach

The sun rises behind the entrance sign to Facebook headquarters in Menlo Park before the company's IPO launch, May 18, 2012.

Credit: Reuters/Beck Diefenbach

SAN FRANCISCO (Reuters) - Shares of Facebook Inc (FB.O) fell about 1 percent on Tuesday, extending the previous day's losses after an investment analyst reported a decline in U.S. users for the No. 1 social network.

Capstone analyst Rory Maher said he used proprietary software to track user numbers by country over the past six months across more than 200 countries and worked out that the social network had shed users in both the United States and Europe. U.S. users declined by 1.1 percent, he said in a research note.

Of the 23 countries where Facebook's penetration exceeded 50 percent, only nine expanded their user base over the past three months, while the remaining 14 countries either had fewer users or saw little change.

Facebook representatives did not immediately respond to requests for comment.

Facebook, which last reported more than 900 million users, has undergone phenomenal growth since its 2004 inception, culminating in a record May initial public offering that valued the company at more than $100 billion.

But the stock has since lost a third of its value. On Tuesday, it slid as low as $27.15, after falling by more than 8 percent on Monday. (Reporting by Edwin Chan; Editing by Richard Chang)

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Comments (5)
modsuperstar wrote:
Anyone who has used Facebook in the last 2 years should have been able to tell this was coming. I was part of the 2007 wave of users and barely use the site anymore. I talk to friends and many who were all about FB 2 or 3 years ago have entirely deserted the network.

To me Facebook’s growth seems very similar to that of RIM. Of course they’re going to be able to find new users in the far reaches of the world that didn’t adopt FB right away, in the same way RIM hid their problems by offering dated tech to backwater countries. Their core base of users in North America is eroding and they’re going to be in for a rude awakening once the growth worldwide slows down.

Jul 17, 2012 10:59pm EDT  --  Report as abuse
Nothing lasts forever, and despite Facebook has been doing wonders for many people on the planet, it has also brought negative things. Plus, there are other networks such as Twitter and Google+ that are more user-friendly and engaging, and their market share keeps growing.

Jul 17, 2012 11:26pm EDT  --  Report as abuse
kipknight wrote:
Looks like everyone is starting to pile onto Facebook. It’s going the same way as AOL, Yahoo, MySpace, et al. Was fun while it lasted…who’s up for the next cover of Fortune?

Jul 17, 2012 12:42am EDT  --  Report as abuse
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