Facebook, Inc. (Nasdaq: FB) is opening up its wallet in an attempt to stay one step ahead of an extremely fickle younger demographic of social media users. On Monday, Facebook acquired polling app TBH, which has generated huge buzz among teen users since its launch in August.
TBH allows users to answer questions about other users anonymously, and the app has already amassed 5 million downloads and 2.5 million daily active users in less than three months.
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Facebook’s massive user base is by far the largest among its social media peers, with more than 2.01 billion monthly active users. Facebook also owns the popular WhatsApp messaging app and the Instagram photo-sharing app.
Yet despite Facebook’s success in growing its user base and advertising revenue, it is struggling to maintain its grip on younger users. A recent study by eMarketer found the number of American Facebook users between the ages of 12 and 17 will decline by 3.4 percent this year after dropping by 1.2 percent in 2016.
Oscar Orozco, a senior forecasting analyst for eMarketer, says teens and tweens seem to prefer Instagram and the Snap-owned ( SNAP) Snapchat platform to Facebook.
“Both platforms have found success with this demographic since they are more aligned with how they communicate — that is, using visual content,” Orozco says.
Piper Jaffray’s semi-annual “Taking Stock With Teens” survey confirms eMarketer’s findings. According to the survey, 47 percent of teens prefer Snapchat as their favorite social media platform. Facebook is the preferred platform for just 9 percent of teens.
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An extra 2.5 million users from TBH likely won’t move the needle much for Facebook in the near term. Facebook has not officially disclosed the terms of the deal, but TechCrunch has reported that Facebook paid less than $100 million, a relatively small amount for the company to pay to take a shot in the dark on TBH.
Facebook may also see TBH, an acronym for “to be honest,” as an opportunity for some positive press in light of recent criticism social media sites have gotten for online bullying and hateful and malicious content. TBH’s anonymous surveys are geared toward positivity and inclusion.
TBH represents a low-risk opportunity for Facebook to get in on the ground floor of the next major social media trend among teens. Snapchat reportedly rejected a $3 billion buyout offer from Facebook in 2013.
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Facebook, Inc. Targets Younger Users, Again originally appeared on usnews.com
