Report Says Facebook Dead to Teens – Or Does it?
A report that apparently says that Facebook (NASDAQ: FB) is dead among teens is making its way through the Wall Street reading rooms this week, but the report doesn’t actually say that at all.
The latest place you can find the story is on Seeking Alpha where the headline reads, “Study finds Facebook “basically dead” to U.K. teens,” but the real story is much different.
First, the story isn’t new at all. Last week, the media started reporting on it but the findings stem from a November 24 blog post by U.K. professor Daniel Miller. The “shocking” piece from the report is, “This month my focus has been on the sixth formers, that is 16-18 year olds at schools in The Glades, our UK fieldsite. For this group Facebook is not just falling, it is basically dead, finished, kaput, over.”
But despite finding those words in the first paragraph of his post, the tone is much more positive than reports would have you believe.
The premise of his blog post is that while Facebook is dying to the 16-18 demographic, they aren’t abandoning the platform completely; they’re using it to communicate with people outside of their peer group.
Miller goes on to say that Facebook is evolving into a platform for a more mature (older) population. Miller said, “I predicted that Facebook was much more naturally a platform for older persons, not the young…I think this will prove correct.”
He found that the platform “lost its cool” among the younger population when their parents and grandparents came to the platform. This sent them to other, newer platforms like Twitter, Instagram (which Facebook owns), Snapchat and WhatsApp.
Miller closed by basically saying that Facebook has evolved from a college dorm room-style hangout to a new way of communicating that will likely have lasting appeal to the older population.
What should the investor take from this?
First, in terms of Facebook’s balance sheet, the older population has more money than the teenagers that weren’t monetizing the site to begin with. If mom and dad want to communicate with long-lost friends on Facebook while viewing the glut of ads, that seems like a pretty good business model going forward.
Second, Facebook owns one of the companies that teenagers ran to—Instagram.
At least so far, the company has done a good job keeping up with the teenage population and assuming that it continues to acquire tech startups, this strategy could be a recipe for longevity for a long time.
Finally, some have responded to the critics by saying that the teens that are abandoning the platform will quickly reach the age of the people embracing it and that fares well for Facebook going forward.
Bottom line, don’t read the headlines—read the source of the report.
Sometimes it says something different than what appears in the first paragraph.
Disclosure: At the time of this writing, Tim Parker had no position in the companies mentioned.
© 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.