Are Privacy Problems Finally Killing Facebook?

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Interesting news from the world of Internet bean counters: Facebook's growth last month stalled to virtually nothing - at least here in the US. And a number of people are pointing to the social network's seemingly endless series of privacy and security gaffes as the culprits.

According to market research wonks Inside Facebook, the world's biggest social network added just 320,000 new US users in June. Most sites would be thrilled to add 320K a month (at eSarcasm, we'd be ecstatic with a quarter of that). But Facebook is the 5000-pound gorilla of social nets, and it takes a lot of bananas to feed it - nearly 8 million new bananas in May, for example.

[ See also: Facebook's privacy controls are seriously broken ]

Why the drop in new users from 7.8 mill to 320K? Normal attrition or monthly fluctuations couldn't account for that steep a plummet. It's pretty clear all that bad press Facebook has been pulling in has scared off the newbies. And frankly, that's a good thing. That's what bad press is for.

More troubling to our hoodie-wearing heroes is that usage of Facebook last month actually declined among 18 to 44 year olds - who represent 70 percent of Facebook's US user base -- to the tune of about 150,000. That's a rounding error relative to FB's 125 million active US users, but a rounding error in the wrong direction none the less.

I'll let the boys and girls at Inside Facebook state the obvious:

"One possibility is that we're finally seeing the backlash from heavy media attention to Facebook privacy issues - some of which were real, some the result of confusion and sensationalism. Regardless of the causes, the age groups that logged a loss in June is also the one most likely to have paid attention to the privacy debates, and the timing could be correct, since the Facebook ad tool we use to gather this data is often several weeks behind."

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