It had to happen: Facebook newbie phase is over

Like all popular Internet services, Facebook has enjoyed rapid growth over the past three or four years, as the service added many hundreds of thousands of users a week (or more--millions in some past months). But that growth has finally stalled out, as everyone who wants to be on Facebook already is. Geometric growth is a wonderful thing, but there was always a finite limit to that growth. Even more telling, the amount of activity by registered users has also dropped.

Facebook is a handy tool for staying in contact with friends and family and for organizing groups for things as mundane as a family reunion or scout troop. The service also gets wide use for causes (Friends of Calico Cats, Save Lindsay Lohan from Herself, etc.). But I have observed this growth phenomena repeatedly with other services, dating back to the early nineties and the first "killer app," email. Eventually everyone that wanted one got an email account, and that was the end of the email boom.

Facebook is vulnerable to competitors and perhaps the biggest danger is not managing internal costs; the company must now trim costs and manage budgets closely, and this does not always happen in time following a rapid and prolonged growth phase.