Facebook’s drastic share price fall last week has set alarm bells ringing about the direction of Mark Zuckerberg’s social media behemoth. 

Facebook’s market cap dropped by about $US123 billion, with its Nasdaq share price falling close to 20% in one day, from $217.50 to $174.89. It appears Facebook’s woes over the past couple of years have finally caught up to its market valuation. 

The main reason cited for this massive fall is Facebook’s projection of slower growth and earnings, made by the company in an earnings call. That’s certainly a significant factor, but it’s hard to ignore everything else that has been going on with the company, including the fake news imbroglio brought on by the US election and privacy issues highlighted by the EU’s implementation of its General Data Protection Regulation (GDPR) laws.

Here’s a list I made in an article I wrote for Switzer earlier this year of the significant problems Facebook is confronting:

  • Russian influence in the 2016 US election, fake news, and the erosion of democracy and civil debate
  • Harassment and bullying, especially of young people and women
  • Content moderation and monitoring in the light of video streaming on Facebook Live of suicides and other disturbing events
  • Fractious relationships with news outlets and publishers
  • Studies and reports concluding that excessive social media could lead to depression
  • Continuing prosecution by EU authorities concerning privacy controls and data collection and sharing

Many of these issues are ongoing and yet to be resolved. They will continue to act as a drag on Facebook’s growth because the social media network has now moved into the fuzzy area of being both a for-profit enterprise and a de facto public utility of sorts. 

Facebook’s ultimate success, for better or worse, is that it has become an almost indispensable part of many people’s lives. Moreover, with 2.19 billion monthly active users, that’s a lot of people who have come to rely on Facebook as a means to stay in touch.

With both user numbers and earnings growth slowing to a crawl for Facebook the social media site, Facebook the company is looking elsewhere for a growth boost. Messaging apps Messenger and WhatsApp are starting to trickle in some revenue for Facebook, while Instagram is turning into a social media star, making sizeable contributions to its parent company’s coffers.

Some of the reaction to the share price drop has been hyperbolic. Peter Switzer’s article on the matter probably delivered a more sober and sensible verdict: “I don’t think this is curtains for Facebook but it’s probably a slap in the face that it deserved for behaviour unbecoming. I’m sure it will survive, but it will have to live with a lower share price for the moment.”

One exciting area to keep an eye on is Facebook’s moves into blockchain and cryptocurrencies. Blockchain promises security and transparency — two things Facebook is struggling to give its users right now.

Zuckerberg’s New Year message for 2018 signalled his intent to explore the potential uses of blockchain for Facebook. Since then, Facebook has moved the head of Messenger, David Marcus, to head up an internal team tasked with blockchain exploration. As the former president of PayPal, Marcus is an expert in the area of payments, which makes him a good fit for the blockchain role. There has also been speculation about Facebook minting its own cryptocurrency — joking referred to by some as ‘ZuckBuck’.

Facebook has the scale and reach to take blockchain mainstream. It has integrated payments and shopping already, and many users already use Facebook as a means to sign-in to third-party apps and websites. 

Inertia tends to mean people are slow to switch banks, insurance companies, and other critical service providers. The same principle could apply to Facebook. Many users will say they have invested too much time into their Facebook account to switch wholesale to another platform. 

No doubt they will use others (LinkedIn, Twitter, Instagram, etc.) for specific purposes, but they will probably keep Facebook because it’s still where most of their friends and family are. This massive user base makes Facebook a prime candidate to mainstream blockchain for broader uses than just cryptocurrencies.

The possibilities of how blockchain’s capabilities in areas like finance and law can integrate with social could prove to be the light at the end of the tunnel for Facebook.