See yah, Facebook. Teens prefer Instagram

Teenage users have been drifting away from Facebook for the last few years, but now it seems they're in a mad rush to get away.

Teenage users have been drifting away from Facebook for the last few years, but now it seems they're in a mad rush to get off the world's largest social network.

A study by investment bank Piper Jaffray (download PDF) about teen behavior on everything from online shopping to social media use shows that Facebook is a distant third when it comes to teens' favorite social networks.

After surveying 7200 teenagers with an average age of 16, Piper Jaffray found that about 80 per cent cited Instagram as their favorite social site, 65 per cent said they like Twitter and about 40 per cent said they use Facebook.

Tumblr was fourth with about 25 per cent and Pinterest rounded out the top five with about 20%. Facebook rival Google+ was cited by fewer then 10 per cent of respondents

The survey also showed a major exodus during the past six months or so: 45 per cent this fall said they use Facebook - a big drop from 72 per cent who said that in the spring. (By contrast, 76 per cent of teenagers said they use Instagram now compared to 69 per cent in the spring.)

"This is very bad news for Facebook," said Patrick Moorhead, an analyst with Moor Insights & Strategy. "Facebook substitutes, like Instagram or Snapchat, seem to pop up every year, providing teenagers an alternative where they probably won't find their parents."

Dan Olds, an analyst with The Gabriel Consulting Group, agreed that the large number of older users on Facebook is driving away younger users. Kids simply don't want to be on the same social network as their parents or the uncle they only see at Thanksgiving.

"As every parent knows, once Mom and Dad get involved in something the kids likes, that thing becomes almost instantly uncool," said Olds.

It's been clear that Facebook was struggling to interest younger users for a while now.

Late last year, a company executive, speaking during Facebook's quarterly earnings call, admitted that the social network was struggling to keep teenagers' attention. "We did see a decrease in [teenage] daily users [during the quarter], especially younger teens," said David Ebersman, Facebook's chief financial officer at the time. He went on to call the network's teen user base "stable".

Although Facebook has more than 1 billion users around the planet, losing younger users is a growing problem.

"Younger users are very fickle," said Rob Enderle, an analyst with the Enderle Group. "They are losing their seed corn. Eventually, their audience will age out and the market will see the decline as unavoidable, collapsing their stock price and company valuation. The resulting bad outlook will become a self-fulfilling prophesy as advertisers will abandon them."

Brian Blau, an analyst with Gartner, doesn't see the situation as dire.

"While this isn't the best news for Facebook, it's also not a sign of impending failure either," he said. "Facebook has and will in the future offer many types of online social experiences. Their apps and platform today is used by a very wide variety of people and businesses, and they will continue to grow as they help offline users around the world come online."

The company, which already owns teen-favorite Instagram, has taken steps to draw those younger users back, even if it's not directly to Facebook's own site.

Instagram rolls out ads in Australia

In February, Facebook bought WhatsApp, a popular mobile messaging app, and in June, it took direct aim at social competitor Snapchat by launching Slingshot, its own mobile app.

Both WhatsApp and Slingshot are aimed at the younger market.

Earlier this year, Facebook inked a deal to acquire Oculus VR Inc., a company that makes virtual reality gaming glasses. Analysts immediately noted that the company had spent $2 billion to lureback some of its lost teenage user.

While analysts are split on whether Facebook can bring younger users back and keep the ones it has, Olds doesn't think Facebook has to to survive.

"As long as they see Instagram as being the cool place to be, that should make Facebook happy," he added. "Plus, it gives them two strong platforms with different demographics to use for advertising. That's a damned good position to be in. What they have is actually better than just having everyone on Facebook because if you only have one platform for all, it's easier for a competitor to come in and steal around the edges."

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