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Created on: February 21, 2013 Last Updated: February 22, 2013
Facebook has ridden a business roller coaster since its Initial Public Offering (IPO) in 2012. One of the reasons for concern about its stock price going forward is its potential for growth. That is, investors want to know that a company has room for growth before they invest in a company. If Facebook has already reached market saturation, how will it grow and make money for its shareholders?
Saturation of the marketplace was already being discussed as early as 2011. By then, it was already clear that tens of thousands of users in the United States and around the world had joined the social networking website, and were quickly discovering new ways to use it - from sharing baby photos to launching revolutions (the Arab Spring).
Data reveals 75 percent of US Internet users on FB
According to TechCrunch.com, which examined all publicly available data sources in 2011, the data show “that 75 percent of all US Internet users are now actively using Facebook. That’s more than any single other service on the web (although Google and Yahoo can appear larger if you combine all of their diffuse properties).” Those figures equate to nearly 225 million unique visits in one month alone!
Of course, that sort of news is great for the company, which will surely be trying to capture that other 25 percent, not to mention expanding into newer or less saturated markets around the globe. The company has also begun seriously addressing the Wall Street critics who downgraded the stock for its slow adaptation to mobile devices, which is certainly perceived to be the technological future.
Global expansion
There is far less reliable information when it comes to global figures. Facebook has suggested it has 955 million active users (and is clearly on its way to 1 billion), but there is no verifiable way to chase that data. There is also the issue of backlash in countries that seek to more tightly control Internet usage, as has been seen in Iran and other Middle Eastern states. And there’s the issue of how you monetize that participation, which remains unanswered.
Not surprisingly, the company seems to do better in English speaking nations, such as Canada and the UK, as well as those nations with a strong English-speaking core. Its largest saturation is, strangely enough, in Iceland.
The bigger challenges for the company lie with countries like China, which have a huge market potential, but are hostile to the social networking site. As noted in its own IPO, Facebook suggested
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