There are of course plenty of risks on the horizon but Facebook has plenty in its armoury to defend itself.
Many have referred to the increasing cost of regulation and new privacy laws as threats to Facebook in the future. If mishandled both could indeed be so, but this is more likely to increase the barriers to entry for future competitors than shut Facebook down.
Privacy laws and fake news both dramatically increase the cost of delivering a social network and Facebook are moving quickly to combat both at significant expense.
It does not take a genius to know that increasing your operating costs over several years is going to have a negative impact on share price, but in Facebook’s mind investing today protects their long term future.
The network itself clearly continues to be a significant barrier for new startups. With 90%+ adults using the platform at least once a month across both USA and Europe, the competition needs to grow rapidly to stand a chance, whilst hoping that Facebook does not mimic them, reducing the likelihood of switching as it did successfully with Snapchat.
Facebook learned that once you reach a critical mass of friends on the network, it increases the likelihood of them staying. Facebook’s increasing investment in local community capabilities should only serve to increase this further as well as enticing users who don’t use the platform as often back.
The broader company platforms also provides a backstop for Facebook. Both Instagram and WhatsApp have managed to maintain a separate identity that does not get associated with Facebook negativity present in the market today. This either provides Facebook with an opportunity to reach the same people elsewhere or bring them back to the main Facebook platform over time. Either option is success for Facebook.
However, this could become increasingly difficult to maintain in the future now that all the platforms are led by a single person inside Facebook following an internal reorganisation.
No matter how much a company may understand strategically how important it is to keep them separate – apps reflect the culture of the teams building them and continuing to maintain culturally separate teams is going to be necessary to having a distinct platform. With the purpose of joining these teams together to take advantage of synergies, this may be impossible to deliver over time.