Interwebology: Market saturation

There are literally billions of websites on the Internet. Within that context, the fact that Facebook makes up 5.5 per cent of American Internet usage is phenomenal. With more than 100 million unique visitors each month and making up 44 per cent of all social sharing, the site has become an Internet powerhouse, with statistics climbing higher each month.

But is the end in sight?

Market saturation is inevitable with any successful product, and while social media is a relatively new creation -- Facebook only recently celebrated its sixth birthday -- it is already approaching plateau. Ninety-three per cent of teens and young adults are now online. The 30-49 age group is close behind at 81 per cent, and 50-64 still comes in at a respectable 70 per cent. Getting people online is not a problem; many programs, services, and jobs require a certain amount of Internet savvy. Getting them to sign up for sites and networks, however, is becoming increasingly difficult as the majority of users who want to use social networking sites already do.

Twitter boasts 75 million unique visitors each month who currently tweet 50 million times per day, but new account creation is not growing as quickly as it used to. Current statistics indicate 6.2 million new users each month, which is impressive only until one considers that this is 20 per cent fewer than last summer.

What's more, the majority of Twitter usage is confined to a few power users. Forty per cent of account holders have yet to post a single tweet, and a further 40 per cent have tweeted less than 10 times.

Twitter has noticed the trend as well, and is shifting into new language markets to maintain growth. In fact, with recent versions of the site in Spanish, French, Italian, and German, only half of tweets posted recently are in English. A full 14 per cent are in Japanese.

Facebook's new account creation has slowed as well, but the time spent on the site by users continues to climb. A little under a year ago, users spent an average of 9.3 minutes per day on the site. By January 2010 that statistic had grown to 14 minutes per day, or more than seven hours per month, which is more than Google, Yahoo, YouTube, Microsoft/Bing, Wikipedia, and Amazon combined.

When comparing frequency of visits instead of screen time, Facebook is still holding strong, having recently eclipsed Yahoo and now sitting in second place behind Google.

Part of this trend is deportalization, a movement away from centralized media portals and towards social sharing. YouTube is still a popular source of video content, but Facebook is quickly becoming a rival in video consumption, with many users preferring to discover videos via recommendation rather than random browsing.

Another factor in the rise in screen time is convenience. Most social networking sites have WAP sites or apps that make them easily accessible via smartphones. Mobile Facebook access has jumped 112 per cent in the past year. Twitter has gone up 347 per cent. This translates to just over 30 per cent of smartphone users.

For some, this amount of usage has become noticeably disruptive in their lives, and many people, teens especially, are going out of their way to cut back on social networking. Some are making “pacts” with friends to only log onto sites with limited frequency, others are giving it up for Lent or as a New Year's resolution, and some users are deactivating their accounts entirely.

This shift away from social media represents a backlash against a growing trend. A recent study indicated that children now consume 7.5 hours of media every day. Interestingly, the common concern over children watching too much TV may soon become a secondary issue, as television viewership actually dropped, with compensatory rises being seen in music, computer, and video game consumption.

In terms of usage, 14 per cent of teens maintain blogs (11 per cent of users over 18), and 38 per cent prefer to share content (30 per cent of adults), indicating that the newest generation of Internet users prefer dissemination over creation. Teens don't even seem to want to tweet, as a mere 16 per cent of tweeters are 24 or younger, versus 64 per cent in the 25-64 age bracket. It seems blogging, even in microblog form, is becoming passe.

Acquiring new users is an increasingly difficult task due entirely to scarcity. The new push seems to be less directed at creating new accounts, and more about maximizing the usage of the ones that already exist.