Does Facebook Inc (FB) Have a User Engagement Problem?

Page 1 of 2

One of Facebook Inc (NASDAQ:FB)’s biggest problems is not something that is discussed very often: although it has plenty of users, it lacks the content it needs to keep people heavily engaged in what it offers. What does that mean? Well, let’s take a look at this problem through the actions of its biggest competitors in technology.

Facebook Inc (NASDAQ:FB), Inc. (NASDAQ:AMZN) original shows

Retailer? Hardly. Amazonhas done well for itself offering shopping-addicted customers free shipping in the form of, Inc. (NASDAQ:AMZN) Prime. But the company also uses Prime as a laboratory of sorts, rolling out a plethora of new services to its hardcore customers. One example of this came in the form of letting users pick from a selection of pilot shows that would get the green-light to become a regular series on Amazon. Five of those shows are now being put into production.

That’s right, television programs on Amazon! Who would have thought? Well,, Inc. (NASDAQ:AMZN) wants you to stick around on its site. It want you to log in and stay a while. It’s no coincidence that the company is offering shows to Prime customers; it knows that in order to keep the revenue rolling in, it needs to keep people on the site. What better way to attract eyeballs than to offer entertainment that is democratically selected by customers themselves?

Google Inc (NASDAQ:GOOG) YouTube channels

YouTube, owned by Google since 2005, has long wanted to develop quality original content that involved more than cats playing the piano. Sure, the occasional feline that can play an instrument for humans is entertaining, but it doesn’t make for the great advertising opportunities that YouTube’s marketing partners are looking for. They want engaging content to keep users coming back!

Google Inc (NASDAQ:GOOG) doesn’t break out revenue numbers on YouTube, but it is estimated that the company is getting somewhere between $2-$3 billion from the site per year. In order to maintain this and grow, Google needs to invest in original content. It is doing this by developing channels. For example, the Ultimate Fighting Championship will have its own YouTube channel, charging subscribers $2.99 per month for access. It’s the next step for an ever-evolving YouTube and a company success where many questioned whether Google would make money with the venture at all.

Apple Inc. (NASDAQ:AAPL)’s streaming service

We don’t discuss enough about Apple’srole as the king of content. Remember, everything that is purchased from the iTunes store gives Apple a 30% cut. That’s great for Apple because it doesn’t even have to take the risks of developing content. Instead, the company simply focuses on making the best products that it can, resulting in the conduits through which people enjoy their iTunes entertainment.

This trend is expected to continue as Apple Inc. (NASDAQ:AAPL) rolls out its streaming service. People are changing the way that they collect and store content, and Apple wants to be involved at every step. Again, the company doesn’t want to develop any content – that’s not where it is an expert. The company is at its best when it creates the experience around the content. Apple is like a fancy picture frame maker. Really fancy.


So far, Facebook Inc (NASDAQ:FB) has put little effort into engagement efforts that would keep users on the site. According to the Guardian, the average time that a Facebook user spends on the site has gone down recently. One explanation for the drop has been that users are migrating from PC-based devices to mobile. Facebook is trying to compensate by developing new mobile strategies, but what is the company trying to do to keep users engaged while on laptops or desktops?

Kudos must be given to Facebook Inc (NASDAQ:FB) for developing a mobile strategy by focusing on smartphone apps. But questions remain as why it is seemingly doing nothing about engagement. One of the biggest draws for Facebook used to be social gaming, but the recent downsizings over at Zynga Inc (NASDAQ:ZNGA) suggests that users are no longer interested in this aspect of Facebook.

Page 1 of 2