Mark Ritson on branding: Facebook felled by open-door policy

It was everything we had hoped for. Funky music, beautiful people and a
gorgeous bar. Over my third spectacularly cool cocktail, I leaned over
to my mate and said: 'What a place, eh! How cool is this?'

He looked at me with a sad, doleful smile and replied: 'Yeah, there is
only one thing wrong with it.' I looked around the bar and all I could
see was perfection. 'What could possibly be wrong?' I asked him. He
nodded at me and then himself and said: 'Us. The only thing wrong with
this place are the two old fat bastards ruining it for everyone else. If
we have found this place, it is only a matter of weeks before the place
slides downhill.'

Cool brands are like a vacuum, nature abhors them. The cooler they get,
the more attractive they become to the uncool and the harder they have
to fight to retain their hip customer base.

This is the big problem for Facebook. Last week, Nielsen Online reported
that its user numbers fell by 5% during January. Facebook has rejected
Nielsen's data and is reporting that the number of active users - people
who have used the site in the past 30 days - has continued to climb.
That excuse might buy it a bit of time, but the bottom line is that
Facebook is about to suffer the classic hangover that follows huge
market growth.

The Facebook brand is only four years old, yet within that period there
is a story of almost bacterial-scale growth. Within a month of the
site's launch at Harvard, more than half of the student body had joined.
A few weeks later, students from all the major Boston universities were
signing up. Within two months, students from across the US' top
universities were members and within a year, students from every major
US college were joining in their millions. After 18 months, high-school
kids could join the site. Finally, in September 2006, the doors were
officially opened to anyone, anywhere in the world.

That is the point at which Facebook signed away its soul. It might be
cool new media, but the oldest rules of marketing still apply. Some
customers don't like other customers. For all their bright new-century
appeal, the founders of Facebook have a case of old-fashioned sales
orientation. It should have hired a proper marketer to ensure that the
wrong members didn't ruin its brand. Unfortunately, it is now too late:
the fat bastards are drinking at the bar.

Facebook members now include the CIA, McDonald's, Tesco, John McCain,
Newsnight, and Febreze. In the US, a growing army of students are
receiving horrifying Facebook invitations from their mothers asking them
to become 'friends'. What was once the secret connection site for the
switched on, is rapidly becoming a demographic zoo with big brand
sponsorship.

Suddenly the super-cool Gen Y target market, low barriers to entry and
huge market size aren't such a positive for Facebook. Competitors could
spring from every corner and the cool kids are probably already joining
up.

It is too late for the site to do anything now other than sit back and
pray that next month's user data turns upward. Fortunately for Facebook
every major religion has also joined its site so it can aim its online
prayers at everyone from the Mormons to the Jehovah's Witnesses. God
knows it will need the help.

30 SECONDS ON ... SOCIAL NETWORKS USER NUMBERS

- Facebook shed about 400,000 UK unique users between December and
January, according to Nielsen Online's latest research.

- This is a 5% drop from 8.9m users in December to 8.5m last month,
after 17 consecutive monthly increases.

- However, Facebook remains the most popular social networking website
in the UK and its audience is 712% higher than a year ago and 9% higher
than three months ago.

- Facebook's nearest rival, MySpace, also posted a 5% drop in UK traffic
from 5.3m to 5.1m between December and January - a fall of 9% since
January last year.

- Bebo, which saw users drop by 2% month on month, was ranked third,
with 4.1m users. Its unique users have risen 53% year on year compared
with January 2007, but have dropped 8% since the end of October.