YouTube has a chance to take advantage of recent Facebook problems and move past the social media platform in terms of website traffic, according to a new study. Meanwhile, Yahoo continues to fade.
YouTube’s parent, Google, already is the undisputed, unthreatened champion of U.S. web traffic, with some 15.2 billion visits in July, according to market research firm SimilarWeb. That’s far ahead of Facebook, which held the second spot with about 4.7 billion visits.
Both numbers reflect recent changes, according to the study.
Google’s “website traffic is down over the past two years, largely reflecting transition of some Google visits from the website per se to apps and voice search,” according to SimilarWeb.
Facebook’s traffic over the last two years has declined from about 8.5 billion monthly visits, but the report cautions not to read too much into that. “This decline reflects a broader paradigm shift, and must be seen in the broader context of the growing ‘Facebook’ ecosystem,” the report said. “Yes, visits to the ‘flagship’ website in the U.S. are down, but their entire network continues to grow,” thanks to such properties as Instagram and Messenger.
“Users of the Instagram Android app, for example, now average 56 minutes a day on the app, up from 27 minutes a year ago,” SimilarWeb noted.
At number three is YouTube. Its growth stems from a relatively simpler reason: “Growing dominance in its category, its emergence as a primary entertainment/information source for the younger generation and a growing openness among consumers in general to video (as opposed to written) content,” the report said.
Over the next two or three months, YouTube could overtake Facebook. “We are on the edge of a paradigm shift – our projections show that soon, YouTube’s traffic will pull ahead of Facebook to become” number two — a prediction not without irony, some observers have said, given Google’s failure to create a respectable social media competitor to Facebook.
That’s not the only change likely in the next few months. Yahoo, now at number four on the website traffic list, will likely lose that rank to Amazon, which is currently at number five. Amazon has overtaken YouTube in the past, but usually during the holiday shopping season.
The report is not kind to Yahoo. “The top five list contains four extremely successful brands … and Yahoo,” SimilarWeb said. Yahoo monthly visits have declined over the last two years to 1.9 billion from 2.9 billion.
“Yahoo’s decline reflects in part the winner-take-all nature of many digital markets – weaker technology and frequent pivots left Yahoo with good-but-not-dominant positions in the fundamental areas of the internet economy, such as search, advertising, content and social,” the report said.
Amazon is the odd character of the list, given that most of its revenue comes from transactions, not advertising. “Given that transaction-oriented sites generally need less traffic than ad-supported ones to be financially successful, Amazon’s traffic of nearly two billion monthly page views and its industry-leading conversion rate combine to highlight the site’s tremendous success,” the report said.
It is far too early, when talking about Facebook’s anticipated ranking slip, to trot out the specter of MySpace. But Facebook is facing some significant challenges, as investors communicated in the immediate aftermath of the social media operator’s second-quarter earnings, which led to a plunge in Facebook’s stock price.
Facebook posted an 11 percent year-over-year growth in daily active users to a 1.47 billion average for June. Analysts had anticipated 1.49 billion. Broken down by region, the misses continued: North America had 185 million reported daily active users against an anticipated 185.4 million, while Europe had 279 million against an anticipated 279.4 million.
Facebook reported a 42 percent year-over-year revenue increase to about $13.23 billion. That missed an analyst target of $13.36 billion. Earnings per share, meanwhile, reached $1.74 against analyst estimates of $1.72.
Facebook lost one million monthly active users in Europe as a result of the EU’s General Data Protection Regulation (GDPR), enacted in late May. And cleaning up after the Cambridge Analytica scandal will cut into Facebook’s profitability as it spends more on privacy and security, according to CEO Mark Zuckerberg.
Such problems — which center around platform governance — probably have origins that stretch back years, at least according to PYMNTS reporting. The takeaway from that article? “It’s critical to manage the inevitable tensions between how platforms make money, the expectations of their investors, the interests of their stakeholders and, ultimately, the trust placed in the platform by those stakeholders — before the government tells you how they see it all working out.”
Time spent on Facebook also is declining, at least according to Nielsen data from the spring. According to one analysis, the data indicates that “Google’s on-demand video platform YouTube and navigation application Waze accounted for a combined 27.4 percent of all time spent on digital media, reflecting a 3 percent jump over the previous year. Meanwhile, Facebook saw time spent on its platform fall by (up to) 16.3 percent.”
None of this suggests that Facebook’s days are coming to an end. The platform is among the most powerful in the digital world, even with recent stumbles. Facebook still has piles of cash and massive stores of talent – but the rankings serve as a reminder that the MySpace fate is always there in the background.
Join izo, CFO Dan Steinberg and PYMNTS CEO Karen Webster on Tuesday, August 21, 2018 at 1:00 p.m. (EDT)