For the first time ever, Facebook admitted during its third quarter earnings call that teens aren't using the social network like they used to.
Overall, the news was good. Facebook is a wildly successful company producing billions in revenue in a single quarter. Facebook defied expectations and earned $2.02 billion in revenue last quarter, half of which was made up of mobile revenue, a point that initially sent company stock soaring in after hour trading. Facebook's mobile users are rising steadily, but their ad revenue is skyrocketing, as this chart from from Business Insider shows:
Company stock saw huge increases after the mobile numbers were announced. But then CFO David Ebersam began talking teens, the most valuable of all social users, and everything took a turn for the worse.
Someone asked about teen performance on Facebook. Studies have shown teens are fleeing to other social networks Twitter and Tumblr, places where their parents can't see them, and they can't see their parents. "This is a hard issue for us to measure," Ebersom told investors. "Our best announcement on youth usage [is that] among U.S. teens was stable overall from Q2 to Q3 but we did see a decrease in daily users partly among younger teens," he said. So it's not that teens are fleeing Facebook completely, it's that they're using Facebook less frequently.
But Ebersom felt the need to continue, to patch up his admission, to keep talking. "This is of questionable significance," he assured those on the other end of the line, "but we wanted to share this with you now because we get a lot of questions about teens." And then he said something so ridiculous it should be put on a plaque and hung in some boneheaded tech executive statement hall of fame. "We remain close to fully penetrated among teens in the U.S.," Ebersom said.
Three months ago Mark Zuckerberg was telling reporters the notion teens are fleeing Facebook was "simply not true." So this is considered quite the turn around, even without the questionable statements about penetrating teens. Cue chaos. Cue mayhem. Cue a running joke on Twitter. The after hours stock gains vanished, and the stock is now only up about one percent.