Is Facebook Losing the Younger Crowd?

February 12, 2018 by Chris Lange

Facebook Inc. (NASDAQ: FB) saw its shares pull back slightly to start the week after it came to light that this social media giant may be losing its grip on younger users. In a recent forecast from eMarketer, Facebook is losing younger users at an even faster pace than previously expected, but not all are migrating to Instagram.

Other social media services like Snap Inc. (NYSE: SNAP) appear to be siphoning away more users. Although Facebook is still net positive in terms of adding users on a monthly basis, most of these users are older.

eMarketer expects to see total Facebook users in the United States reach 169.5 million this year, up just under 1% from 2017. Meanwhile, Facebook’s proportion of social network users will continue to decline over the forecast period.

According to eMarketer:

In 2018, the number of US Facebook users ages 11 and younger will decline by 9.3%. Additionally, the number of users ages 12 to 17 and 18 to 24 will decrease by 5.6% and 5.8%, respectively. This is the first time eMarketer has predicted a decline in the number of US Facebook users in those age groups.

Facebook will lose 2 million users ages 24 and younger this year, eMarketer estimates. But not all of those users are migrating to Instagram. For example, eMarketer predicts Instagram will add 1.6 million users ages 24 and younger. Snapchat, meanwhile, will add 1.9 million users in that age group. Snapchat will continue to have more users ages 12 to 24 compared with that of Instagram.

On the other hand, Instagram is still bigger in the United States than Snapchat. Instagram users are expected to grow 13.1% to 104.7 million in 2018, compared with Snapchat, which expects to see its base increase by 9.3% to 86.5 million.

Shares of Facebook were last seen down about 1.5% at $173.50, with a consensus analyst price target of $222.81 and a 52-week range of $132.55 to $195.32.

Snap traded up 0.5% at $18.90 a share, with a 52-week range of $11.28 to $29.44 and a consensus price target of $15.74.

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