The top five threats facing Facebook

Social networking is a notoriously fickle medium.

It’s tough to stay on top indefinitely, and social media’s short history is littered with sites that started hot but quickly fizzed.

Friendster, MySpace and, most recently, Peach serve as cautionary tales, reminders that the social media audience is quick to move on.

That’s all the more reason why Facebook’s success has been remarkable. It’s been the top social network for a decade, and it now commands nearly 15 percent of all online advertising dollars in the United States.

That’s impressive-and yet Facebook is facing a raft of issues, underscored by the social networking site’s recent decision to tweak its newsfeed.

It was prompted in part by concerns about the number of updates people post on their profiles, which have dwindled, indicating a drop in engagement.

That’s a huge concern because engagement is Facebook’s No. 1 commodity.

Here are five threats to Facebook’s dominance that the social networking site will need to address in the coming years in order to stay on top.

1. Newsfeed confusion

Facebook changes its newsfeed algorithm regularly to keep users happy. But when tweaks are poorly received, it can hurt the social network’s credibility, leading to accusations it’s just chasing ad dollars instead of trying to improve the user experience.

“Users who have just recently come to rely on Facebook for news may go elsewhere if they do not research enough or care to research enough on the algorithm change,” warns Jeremy Simon, director of influencer and partnership marketing at KBS’ Attention, a social media agency.

2. Aging users

Facebook’s usage among Baby Boomers has skyrocketed, and buyers say that presents a perception problem for advertisers. They want to be where young people are, not where their parents and grandparents are.

“The algorithm shift on the surface continues to reinforce Facebook’s positioning as a place for Baby Boomers to catch up on their family, whereas Snapchat and Instagram and messenger apps are where the actual personal news and conversations are actually taking place away from parents/grandparents,” says Simon.

3. Over-reliance on native advertising

It’s become difficult to distinguish the difference between sponsored posts and organic ones within Facebook feeds. The social network will need to avoid backlash over the thin line between content people want to see and what pays the bills.

4. Other, hotter social media sites

With more than 1.6 billion users, Facebook has a big advantage on every other social site. But it’s no longer perceived as “hip” or “hot.” Those designations are reserved for newer sites such as Instagram and Snapchat, and that perception extends to planners divvying up ad dollars.

5. Privacy concerns

When Facebook filed its initial public offering a few years back, the company had to submit a list of 50 potential threats to its growth and survival. One of them, not surprisingly, was privacy concerns, and this has the potential to get more serious over the next few years.

All it takes is one major data breach or privacy flap to turn ambivalent users into former users.

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