Once Facebook Runs Out of People, It Will Need New Products

By Tom Johansmeyer Comment

Add this to the list of reasons Facebook needs to develop new revenue streams… it’s running out of new users. According to estimates from eMarketer, the social network will have 132.5 million users in the United States in 2011, reaching 152.1 million by 2013. This year’s 13.4 percent growth rate will fall to 8.2 percent next year and 6.1 percent in 2013. The days of high growth rates are clearly over, at least in mature markets.

In the United States, older Baby Boomers and senior citizens, eMarketer says, will drive the user gains. By 2013, penetration of Facebook into teen and young adult markets will range from 80 percent to 89 percent, leaving little effective room for growth.

So, what does this mean for the hottest social network on the web?

The need for the company to develop new streams of revenue is acute. An advertising model predicated upon end-user growth becomes constrained when fewer new people get on board. While increasing the number of impressions delivered through end-user engagement with the platform could help, the increase in friend relationships necessary – not to mention time on platform – would lead to the same user behavior that ultimately led to the demise of MySpace.

As things stand now, when Facebook runs out of new people, it will run out of ways to make money.