Zuckerberg faces new risks as scandal-hit Facebook nears a saturation point

Scandals have damaged the company, but the most pressing problem is that there aren't that many people left to convert- they're all already on Facebook

Companies News: After all the controversy Facebook Inc. has generated in recent months, it seemed almost inevitable that at some point, the social media giant would get what it had coming. A reckoning. Wednesday’s disappointing earnings report and Thursday’s historic 19 per cent stock drop appeared to be a fitting conclusion to an easy narrative.

But the story isn’t that simple. Yes, the privacy protections the company put in place after a series of scandals played a role in the dismal earnings. But the company’s bigger problem is that the main social network— the invention that made it a corporate behemoth—simply can’t grow much more. And the new dollars Facebook will mint in the next few years will have to come from businesses that are less certain, like ads in chat applications, virtual reality, television-like video content and social media updates that disappear.

Facebook’s winning strategy has centred on advertising in its news feed. People come to the social network, scroll through, and see the ads for their friends’ baby photos and news links. Whenever Facebook needed to make more money, it just dialled up the frequency of ads, or aggressively courted more and more people around the world to sign up for Facebook.

Article Source >> BS