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Why Facebook’s User Growth Stalled in Q2 2018

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Facebook’s user growth in Q2 2018 was its slowest growth ever

A major disappointment for Facebook’s investors was that its user growth slowed substantially in the second quarter. Facebook added only 22.0 million monthly active users during the second quarter, compared to an addition of 49.0 million during the first quarter of the year.

This represents growth of 1.73% in the second quarter, sequentially, which is by far the slowest user growth rate the company has ever recorded. Facebook now has 2.23 billion monthly active users.

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Facebook’s user growth is slowing due to a number of factors

A number of factors contributed to the slowing user growth. First, the GDPR (General Data Protection Regulation) regulations that were in play last quarter cost Facebook ~3.0 million users in Europe. The Cambridge Analytica in March led to many users deleting the app.

However, the main driver behind Facebook’s slowing user growth is the younger audience abandoning it for apps like Instagram and Snapchat (SNAP), which they find more appealing.

Facebook’s daily active users reached 1.47 billion in the second quarter, rising a subdued 1.51% sequentially compared to 3.42% sequential growth in the first quarter. The silver lining is that the platform’s daily active user growth is in line with its monthly active user growth, which means that users are still visiting the site often.

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