Facebook’s inability to generate a revenue stream from mobile has been touted as the main reason for the stock’s post IPO slump, but the latest comScore figures have unearthed another potential problem.
With more than 900 million users worldwide, many analysts have been saying for some time that Facebook’s user base may have peaked and reports of declining visitors in more technically advanced countries appear to show some user fatigue.
The latest comScore figures say that the number of unique visitors in the US was 158.01 million in May, down from 158.7 in April and 158.9 in March, which is just a 0.6% drop, and year-on-year the May number was actually up 0.5%, but figures for the last six months show a worrying trend.
ComScore data shows that Facebook has seen a 4.8% drop in unique U.S. visitors since peaking at 166 million in November 2011. Nielsen data also suggest a drop. According to Nielsen’s numbers, Facebook had 156.2 million uniques in November 2011 and 152.7 million in May 2012. That 2.2% drop would still be significant, although lower than comScore’s report.
Valuation based on future growth
These figures must worry investors; the share price is still trading at 80 times revenues and is therefore based on anticipated future growth. Now there are still more than six billion people in the world who are not already on Facebook and globally unique visitors are still showing healthy growth, but the US trends could be a sign of things to come elsewhere.
Facebook’s valuation is largely based on the fact that it has a captive audience and it’s only a matter of time before the company discovers new and ingenious ways to extract revenue from them. But it may take a while to develop these new revenue streams and if the US downward trend catches on elsewhere, the audience could have dwindled significantly by then.