Facebook made a startling admission in its earnings announcement this month: it was seeing a "decrease in daily users, specifically among teens". In other words, teenagers are still on Facebook; they're just not using it as much as they did. It was a landmark statement, since teens are the demographic who often point the rest of us towards the next big thing.
Their gradual exodus to messaging apps such as WhatsApp, WeChat and KakaoTalk boils down to Facebook becoming a victim of its own success. The road to gaining nearly 1.2 billion monthly active users has seen the mums, dads, aunts and uncles of the generation who pioneered Facebook join it too, spamming their walls with inspirational quotes and images of cute animals, and (shock, horror) commenting on their kids' photos. No surprise, then, that Facebook is no longer a place for uninhibited status updates about pub antics, but an obligatory communication tool that younger people maintain because everyone else does.
All the fun stuff is happening elsewhere. On their mobiles.
When mobile messaging apps such as WhatsApp first emerged in 2009, they looked like a threat to mobile carriers. Everyone from Vodafone to Dutch operator KPN was mentioning them in sales calls. Mobile operators are estimated to have lost $23bn in SMS revenue in 2012 due to messaging apps, which host free instant messages through a phone's data connection, which these days is often unlimited. Now these apps are becoming a threat to established social networks too.
WhatsApp, the most popular messaging app in the UK and on half the country's iPhones, according to Mobile Marketing Magazine, has more than 350 million monthly active users globally. That makes it the biggest messaging app in the world by users, with even more active users than social media darling Twitter, which counts 218 million. About 90% of the population of Brazil uses messaging apps, three-quarters of Russians, and half of Britons, according to mobile consultancy Tyntec. WhatsApp alone is on more than 95% of all smartphones in Spain. The power users and early adopters of these apps, the ones you're most likely to see tapping their thumbs over a tiny screen, are under 25.
Part of the reason is that gradual encroachment of the grey-haired ones on Facebook. Another is what messaging apps have to offer: private chatting with people you are friends with in real life. Instead of passively stalking people you barely know on Facebook, messaging apps promote dynamic real-time chatting with different groups of real-life friends, real life because to connect with them on these apps you will typically already have their mobile number. The trend flies in the face of recurring criticism of young people – that their social lives are largely virtual – when many more are in fact embracing the virtues of privacy and services like WhatsApp, which shun advertising.
"I only use WhatsApp to communicate and send pics these days," said Natalie West, a twentysomething financial sales associate in London. In the last few years she has used Facebook less and less because she doesn't want "the whole world to know" what she's doing. When people set up events and get-togethers on Facebook, West and her boyfriend tend to reply on WhatsApp instead because "it's more personal". For similar reasons, some 78% of teenagers and young people use mobile messengers to plan a meet-up with friends, according to research advisory firm mobileYouth.
Another factor is the rise of the selfie, often silly self-portraits taken at arm's length with a mobile. Almost half of the photos on Instagram feeds among people aged 14 to 21 in the UK are selfies, according to mobileYouth. Sending those photos via a mobile messaging service is safer than broadcasting them on Facebook, since they're less likely to be seen by a boss or dozens of Facebook friends you forgot you had. Selfies are even bigger on Snapchat, the evanescent photo sharing app that deletes a photo several seconds after it has been viewed. With about 5 million active monthly users, the service has inevitably become a favoured way for teens to send sexy or even naked photos of themselves, an ill-advised practice known as "sexting". But teens also love Snapchat because it allows them to send inane photos of themselves without fear of leaving a permanent digital footprint.The California-based app is seen as so hot, with so much potential for growth, that it has already been pegged with a $2-$4bn valuation in the Silicon Valley tech community. Estimates are even higher for WhatsApp, which makes money through an annual subscription; some observers suggest it could be worth $5bn or more.
The final, big reason why young people are gravitating towards messaging apps is that many of these apps no longer do just messaging. They are social networks. The best examples come out of Asia, with messaging platforms KakaoTalk (South Korea), WeChat (China) and LINE (Japan). All have tens of millions of users, with WeChat boasting more than 200 million, and take their services beyond offering straight messaging to games, stickers and music sharing. Before you write off digital stickers as inane, they are a decent moneyspinner for LINE: of the $58m the company made in sales in the first quarter of 2013, half came from selling games and 30%, or roughly $17m, from sales of its 8,000 different stickers. Some are free or, in Spain where LINE has 15 million registered users, cost around €1.99. Often users choose stickers instead of words when they need to express themselves, one LINE executive said; it's known to have helped couples get over fights more easily by offering multiple stickers to say sorry.
Gaming is another money-maker. With KakaoTalk, which is thought to be on 90% of all smartphones in South Korea, registered users can choose from more than 100 games they can play with one another, and games alone helped the company generate $311m in sales in the first half of 2013. A couple of non-Asian messaging apps such as Kik (Canada) and Tango (US) are turning themselves into full-fledged platforms too, inviting software engineers to create games that run on their apps. They will typically let developers take home half the revenue while taking a 20% cut. App stores such as Google Play and Apple's App Store take the remaining 30%. Tango took all this a step further this month when it partnered with music-streaming Spotify to allow its 60 million monthly users to share music clips with one another. Two years ago Spotify launched a similar partnership with Facebook. "What we're seeing in the messaging space is an explosion in growth," said Spotify's vice-president of strategic partnerships, Tom Hsieh, who hinted there would be partnerships with other messaging apps in the future too. "I don't think there's been a clear winner [among them] yet."
It is worth noting that, with so many of these apps getting into games, stickers and now music sharing, it is becoming harder to define them as messaging services. "I think there is some misunderstanding here in how we categorise these apps," says Pavel Durov, who founded Russia's version of Facebook, VK.com, and recently launched a mobile messaging service called Telegram. "They are social networks. You have a social graph there; a newsfeed; you have profile pages. Many things that are related to social networks by definition." Social chat apps is another way to define them, says Gartner mobile analyst Brian Blau. "People are sometimes using three or four of these apps."
Many of the Asian chat apps such as Kakao and LINE are struggling to appeal to US users, though, because of the stylised nature of their interfaces – vivid colors, manga-style characters and lettering. "We're used to being a little more subdued," says Blau, who is based in the US.
In the race to become platforms with extra frills, the big exception is WhatsApp. Founder Jan Koum has said publicly that he has no plans for his service to start providing games. Koum and his co-founder Brian Acton, both former Yahoo managers who were one of the first to create a mobile messaging app for smartphones with WhatsApp, see it almost as a pure communication utility that should not be saddled with extra features that might slow things down. "That's what's happened with most social networks on the web now," says Neeraj Arora, business manager for WhatsApp, which is based in Mountain View, California. "It tries to do everything for everyone. Our core is communication."
That is a somewhat conservative approach compared to most other messaging platforms, yet WhatsApp is still quietly broadening out. In the same way Facebook first rolled our Facebook Connect in 2008 to allow people to use their profiles to like or comment on other websites, WhatsApp recently unveiled an instruction set known as an API that lets other mobile apps share content through WhatsApp too. The roll-out is still in its infancy, but after one music streaming service in the Middle East added the WhatsApp sharing button, its was surprised to find its users sharing 50% more songs via WhatsApp than Facebook.
The future for these messaging apps is still uncertain. Some in the industry expect buyouts from big internet companies like Google, which was rumoured to have flirted with WhatsApp earlier this year. Facebook already has its own popular Messenger service, while Apple has iMessage – both are popular, but lack the gaming ambitions of Asian chat apps. Still, it is hard to imagine these players consolidating to create a global social network as big as Facebook.
"If you look at the landscape, it's geographic," says Greg Woock, CEO of the US calling and messaging service Pinger. "We dominate the US, WhatsApp dominates Europe, LINE owns Japan." China's WeChat is trying to break out of that mould. Its executives have talked about expanding internationally, and custom building its app to suit local tastes for how it should look. "We have put a lot of thought into how to take it outside of China," Martin Lau, the president of WeChat owner Tencent, said at a recent conference.
Who dies, survives or thrives may ultimately depend on how well any of these players can make money. Snapchat, arguably a photo-sharing service more than a messaging app, has yet to explain how it will do so.
WhatsApp says it is already profitable thanks to its annual subscription fees; Pinger relies on advertisements; WeChat, LINE, Kakao and Kik sell stickers and games. Some of these services are bound to go out of fashion, and a few business models will fail, and they're still a world away from the $2.1bn in sales that Facebook brought in this last quarter.
But there is little doubt that millions of teens will use these apps more and more, and older demographics will eventually join them. There's a good chance that will continue to be at the expense of Facebook.
Parmy Olson is a technology writer for Forbes magazine in San Francisco. She is the author of We Are Anonymous (Little, Brown, 2012).
Top messenger apps
WhatsApp
Started in 2009 by two ex-Yahoo staff, this smartphone messaging system handles more than 10 billion messages a day and is reckoned to have more than 250m users worldwide. One of the most popular paid-for apps on any platform, and a threat to telecoms companies which charge for texts.
Snapchat
Allows users to send "view once'"photos, specifying how long the photo will remain on the recipient's device. "Snap an ugly selfie or a video, add a caption, and send it to a friend (or maybe a few). They'll receive it, laugh, and then the snap disappears," says Snapchat. The company is valued at $800m and users send 350m messages per day, up from 200m in June.
WeChat
The Chinese social media app, which handles voice messages, snapshots and emoticons, has more than 200m subscribers. The vast majority of users are in China, though it also has subscribers in the US and UK. It is being tipped as the first Chinese social media application with the potential to go global.
KakaoTalk
A Korean messaging app with more than 90m users that generated $42m of revenues in 2012, ending the year with users sending 4.8bn messages a day. The company recently launched KakaoHome in its home country: a similar app that provides "a customised home screen experience on your smartphone" with widgets, notifications and deeper integration of the main messaging service.
• This article was amended on 10 November 2013. Snapchat has 5 million active monthly users, not 150 million. This has been corrected.
