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Facebook Has Nowhere to Go But Down

General impressions of Mark Zuckerberg’s speech at yesterday’s TechCrunch TC Disrupt conference have been mixed with good reason: The Zuck called his company’s post-IPO performance “disappointing” and hinted vaguely at the profit potential of mobile ventures that the public is obviously way too dumb to understand while acknowledging that Facebook’s mobile apps aren’t as good as they should be; still, investors have confidence in his ability to stay atop the social flock, and stock prices rose nearly 5% after his speech.

The Zuck tried very hard to convince all interested parties that he knows exactly what he’s doing. The key quote: “For me it’s not about fun, it’s about mission. I’d rather be in the cycle when people underestimate us.”

While considering whether smartphones like the brand new iPhone 5 will save Facebook, we figured that now is a perfect time to re-pose the perennial question: Has the social network already reached its peak capacity and influence?

In an unusual Harvard Business Review blog post last week, Jeff Stibel compared Facebook to the human brain: Like a typical social network, the brain spends much of its early life expanding but reaches a “saturation point” after which its millions of neural connections (like Facebook friends) stop growing and begin refining themselves. The brain actually loses mass throughout adulthood, and Stibel thinks that Facebook, like the 20 year-old brain, has reached the apex of its growth—a fate destined to befall all social networks.

Stibel posits that the average Facebook user now has far too many connections for the service to be effective–and that the inevitable response will be to decrease usage and wait for the next network to spring up.

Is Stibel onto something? One major point contradicts his thesis: While the growth of Facebook’s user base is slowing, it is more important to the business world than ever before–the number of businesses that call it “crucial” to their marketing and PR efforts has doubled in the past three years. This was never true of MySpace or Friendster, and the trend will continue until the Facebook user base either begins shrinking significantly or its members stop signing on every day.

So what do you think? Can Facebook’s influence expand even as its growth rate slows? Or are all social networks temporary by nature?

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