More Talk About Facebook As a Passing Fad

Ever since Facebook opened the site to the general public in 2006, we’ve been hearing that it’s a fad and that it won’t last. Even last week, someone on Facebook asked why I thought MySpace failed and if Facebook will suffer a similar fate. (I believe MySpace’s greatest detriment was freedom: people were free to design their pages, leaving us with non-designers igniting epileptic fits with their flashing banners, fluorescent colors and sparkling spaces as well as the freedom for SPAMMERS to take over a person’s page – neither problem has plagued Facebook.)

By all accounts, Facebook is here to stay, having become so ingrained in our online behaviors that you’d be hard pressed to find a web site that doesn’t include auto-publishing to Facebook. (So far, IMDB is the only community-driven site I’ve found that ignores the social networking site.)

Nonetheless, according to the results of a new Associated Press-CNBC poll and as the company prepares its initial public offering of stock, half of Americans think Facebook is a passing fad and that the social network’s expected asking price is too high. (Facebook’s Wall Street debut could value the company at $100 billion, making it worth more than Disney, Ford and Kraft Foods.)

Passing fad? Well, let’s look at the numbers: more than 40 percent of American adults log in to the site to share news, personal observations, photos and more at least once a week. In all, some 900 million people around the world are users. Facebook’s revenue grew from $777 million in 2009 to $3.7 billion last year. And in the first quarter of 2012 it was more than $1 billion.

Just a third of those surveyed think the company’s expected value is appropriate, while 50 percent say it is too high. Those who invest in the stock market are more likely to see shares as overvalued, 58 percent said so. About 3 in 10 investors say the expected value of shares is fair.

Young adults, a majority of whom log on to Facebook daily, are more willing to invest in the site: of adults under age 35, 59 percent say Facebook is a good bet. Compare that to the views of senior citizens: Only 39 percent age 65 and over say Facebook shares are a good investment. Nearly half of Gen X’ers (ages 35-44) say the company is a good bet, as do 55 percent of middle-aged people.

Those under 35 are the generation most interested in Facebook’s IPO because they’ve grown up immersed in the social network.

Conversely, it’s the rare senior citizen on Facebook: Just 21 percent have an account. Half of baby boomers have one. But most of the 56 percent of the country that’s on Facebook is young – two-thirds of Gen X’ers and a staggering 81 percent of people 18-35 use the site regularly.

Even with the rise of Twitter and Google Plus, 55 percent of Zuckerberg’s peers go on Facebook every day. A third log on several times a day. Despite the intensity of their use, a narrow majority of young adults predict Facebook’s appeal will fade down the road (51 percent), fewer think it will stick around as a service (44 percent).

The public overall is similarly divided on the company’s future. Just under half of adults (46 percent) predict a short timeline for Facebook, while 43 percent say it has staying power.

Young people are more aware of Zuckerberg and have more positive views of the CEO. Overall, one in five Americans say they’ve never heard of him, 30 percent don’t have an opinion and 14 percent plain don’t like him. Only about a third have a good impression of the CEO, who has alienated some with Facebook’s ever-changing approach to user privacy.

But 46 percent of people under 35 like him. And a scant 4 percent of those younger adults say they’ve never heard of him.

The privacy issue is the proverbial thorn in the site’s side. Three of every five Facebook users say they have little or no faith that the company will protect their personal information. Only 13 percent trust Facebook to guard their data, and only 12 percent would feel safe making purchases through the site. Even Facebook’s most dedicated users are wary – half of those who use the site daily say they wouldn’t feel safe buying things on the network.

As for how Facebook makes most of its money, selling ads, 57 percent of users say they never click on them or on Facebook’s sponsored content. About another quarter say they rarely do. And, Facebook suffered a slowdown in its first quarter and the company anticipates its days of hyper user-growth are behind it.

Despite user discontent about privacy and the first-ever slowdown in new user adoption, Facebook and Zuckerberg have connected with many Americans and by the end of this week’s official IPO, we will surely learn just how strong that connection really is.

The Associated Press-CNBC Poll was conducted May 3-7, 2012 by GfK Roper Public Affairs and Corporate Communications. It involved landline and cell phone interviews with 1,004 adults nationwide and has a margin of sampling error of plus or minus 3.9 percentage points.

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