Written by Paul Feldman, President of Zenais Marketing

Featured in Dallas News & Advertising PR News

ANNAPOLIS, MD, November 11, 2010– Before we opine why Facebook has reached its zenith and everything else may be sagging downhill from here, a few facts to the contrary.

Facebook has more than 500 million active users worldwide — half of whom log on every single day –and collectively spend 700 billion minutes per month on the site. Of these, there are more than 200 million active users currently accessing Facebook through mobile devices and these particular users are typically twice as active as their computer-linked colleagues. And finally, on the revenue side of the equation, Reuters has reported that Facebook may have generated nearly $800 million in revenue last year while still other reports show that the social networking juggernaut is currently one of the world's leaders in delivering display ad impressions.

So what's not to like? With an implied market value north of $25 billion, this should be one gigantic smiley face. Unfortunately, five compelling reasons suggest that Facebook may not look quite as pretty over the next few years.

First, the world of online display ads and their perceived effectiveness is under siege. According to DoubleClick, a subsidiary of Google, the click-through rate for static online ads is now approximately .10% and dropping. Translation: only one person in every thousand bothers to click on a display ad and only a small subset of those ever makes a purchase. As one online expert, Shawn Noratel, founder of Liquified Creative, noted, "Online advertisers are increasingly wary of throwing precious ad dollars into an ever-expanding online universe. To grab eyeballs, it takes something very special – every time."

Second, big is boring. As Facebook becomes a global presence with a "population" only topped by two countries — China and India — innovation may collapse under its own weight to the rigors of convention. The hip factor is long gone at age six, and with the shrinking lifecycle of online companies, many suggest that this one is already a bit long in the tooth. Sound crazy? Think AOL. At its peak, it had 30 million customers who actually paid something each month to be considered members and few thought that it could stumble.

Third, content is king. The number one Internet site remains Google and for a very good reason. People use it to find information. Facebook, on the other hand, is all about finding people. And many of these people, once found, just don't have very interesting content to share. Witness a 58 year-old relative posting that he likes coffee and a 48 year-old friend searching for someone to take care of her imaginary herd on Farmville. That's not content. What these people and others are doing is called self-expression. Nice, but not enough to keep the masses coming back day in and day out – and buying things in the process. As Noratel explained, "Consumers ultimately want some form of news. It can be personal, it can be brief but it must be relevant and substantive to the member."

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