Facebook Inc (FB) No Longer Home to Teens

The chart shows that the 18-24 year old group lost the largest amount of users in the last 3 months at over 2 million. The second largest group was the 25-34 year olds at nearly 2 million users. Ironically the only group to gain was the 65+ year old group that likely diminishes the younger groups desire to stay on the site. Its one think to deal with a nosy parent, but showing your wild party pics to your grandparents is a whole different issue.

As with all of the monetization plans of Facebook Inc (NASDAQ:FB), the investment community always overlooks the number one fact. All social networks eventually die whether a virtual network such as MySpace or a real world network of high school or college friends.

Reduced competitive impact

The long-term impact to Google Inc (NASDAQ:GOOG) and Yelp Inc (NYSE:YELP) appears to decline on a daily basis. Clearly Facebook will make some inroads into search and grab a minimum user base for search functions. No signs exist that users want Facebook to provide any services such as search and user recommendations.

Analysts still expect Yelp to grow revenue by 54% this year and nearly 40% next year. Both indications that Facebook Inc (NASDAQ:FB) is having no impact on the services it hopes to replace.

Conclusion

Remarkably, the analyst community and media outlets continue to fight over whether Facebook deserves the vast $61 billion valuation while ignoring the potential for the social network to face the typical demise.

The SocialBakers data is worth following as it suggests the network peaked in October. The desire for the company to increasingly monetize the massive network of users is only likely to push the average user away from the service.

It doesn’t appear that Google Inc (NASDAQ:GOOG) or Yelp Inc (NYSE:YELP) have anything to fear. Google will remain the place to search for actual business-related functions. Likewise, Yelp collects data from users that voluntarily share in hopes of helping the community as a whole.

In the end, Facebook Inc (NASDAQ:FB) will never be able to monetize users that don’t exist in the future. If teens are fleeing the social network, the future doesn’t appear bright enough to justify a valuation of over 9 times the current revenue base.

The article Facebook No Longer Home to Teens originally appeared on Fool.com and is written by Mark Holder.

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