Facebook: Still Dominant or Newly Vulnerable?

There's no denying the size and influence of Facebook. Just a little more than a decade after being conceived in a Harvard dorm room, the social network now connects billions of people.

Yet that growth curve hasn't insulated Facebook from questions about its vulnerability. MySpace, after all, was once the most visited website in the United States and the world's largest social network. Before MySpace, AOL once served as the "gateway to the Web," providing  both Web access and site curation. 

Both of these once-dominant properties were consigned to irrelevance within a few years of their respective peaks.

Will Facebook -- as dominant as it is -- avoid the same fate? Let's take a closer look.

The case for Facebook's vulnerability

If you follow the social media sector , you're probably familiar with the notion that Facebook has lost its cachet among younger users. And it's true: There is evidence to support the idea that younger people are unfriending the network.

In 2018, for the first time since the network was in its formative stages, fewer than 50-percent of 12-to-17 year olds will use Facebook at least once per month. The number of people between the age of 12 and 24 using Facebook will decline by around five-percent in 2018. And among the youngest cohort, the decline is even steeper -- 9.3 percent.

Here's the truth: Facebook has lost its cool, to a certain degree, by being perceived as a network for older users. And that's a real cause for concern if you're Mark Zuckerberg -- or a Facebook shareholder.

The case for continued Facebook dominance

There's no denying that Facebook is exhibiting weakness among younger users. Yet the company is much more than a single social platform. Facebook has acquired dozens of companies, including key acquisitions such as Instagram, WhatsApp and Oculus. 

Instagram continues to grow at a rapid pace, eclipsing one billion monthly users for the first time in June, 2018. That's an increase of 200 million monthly users in less than a year. Unlike Facebook, Instagram still maintains a level of ambient coolness that appeals to younger users.

Oculus, on the other hand, is the highest-profile of Facebook's forays into the world of virtual reality. After investing enormous resources in mobile in recent years, Facebook is now doing the same with virtual reality, artificial intelligence and machine learning -- something that will allow it to attract new users by creating deeply compelling experiences that can't be replicated anywhere else.

The takeaway

Facebook is mitigating its vulnerabilities by doing two things: Expanding its portfolio to include competing social platforms that appeal to younger audiences and investing in cutting-edge tech.

Given the company's already massive competitive advantages, it seems highly unlikely that "Mark from Facebook" will end up sharing the same fate as "Tom from MySpace."