That Story About How Facebook Lost Users In May Was A Bunch Of Crap

A couple of days ago, a story banged around the news-o-sphere saying that the number of Facebook users in the US had shrunk in May.

This set off much hand-wringing about how Facebook was starting to collapse just as everyone was getting excited about the IPO.

Trouble is, the story was bunk.

According to Comscore, Nielsen, and Facebook, the number of US Facebook users grew in May (see below).

The story that Facebook’s users dropped in May originated here. The report was based on data that Facebook produces for its advertisers. This data, says a source at Facebook, does not include mobile usage. The source believes that this is one reason why the data understated Facebook’s US usage.

(Facebook’s mobile usage increases significantly in the summer, the source says, when kids leave school).

(And to be clear: The story that Facebook’s usage dropped was based on data that Facebook generated and released. It just wasn’t data that Facebook expected to be used by anyone but advertisers.)

From a broader level, ignoring monthly fluctuations, Facebook’s growth in mature markets is obviously flattening. And at some point, the number of users will stop growing. At that point, the company’s growth will have to come from increased engagement: Existing users using the service more intensely.  And it would obviously be a bad sign if the number of users or usage in the company’s mature markets started to shrink–if, say, people were getting bored of Facebook and unplugging from it.

Facebook could help avoid the sort of misinformation and confusion of the May numbers by releasing some usage stats each month or quarter, so observers can track the company’s progress for themselves. These stories might include the number of active users in each major region, the average time spent on the site per user, number of advertising clients, revenue, and so forth.

Facebook will be public eventually, or at least will have to release data like this eventually, so it might as well start now.

Here’s the key part of the Comscore report:

Facebook Traffic May 2011

Photo: Comscore

Today Facebook is the 4th largest U.S. web property in audience size with 157.2 million visitors in May, representing its all-time high and a gain of 3.2 million visitors vs. the previous month. While other reports have been circulating that Facebook witnessed a pronounced user decline this month, comScore data shows quite a different story. Given that Facebook now reaches 73% of the total U.S. Internet population each month, one thing we should anticipate is that the site’s audience cannot grow forever. The law of large numbers says that once a site has penetrated the majority of a market, each incremental user becomes that much more difficult to attract. So given its size, Facebook’s future U.S. growth is likely to come more from increasing usage per visitor than its ability to attract new users in perpetuity. One impressive stat to note is that Facebook’s average U.S. visitor engagement has grown from 4.6 hours to 6.3 hours per month over the past year, so it appears to be succeeding in that regard.

Nielsen’s monthly report backs this up. It says Facebook’s US users increased by 5% in May:

Overall web activity increased slightly in May, and among the Top 10 sites Apple witnessed the highest increase in monthly visitors, with more than 5.7 per cent more uniques during May. Facebook also increased unique U.S. visitors by 4.7 per cent compared to the prior month, with average visitors spending slightly less time (-0.8%) on their website in May.

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.

Tagged In

facebook sai-us