A version of this story ran Oct. 6.
) -- It must feel pretty good to be
. It's coasting into an IPO with some 800 million users worldwide and the confidence of a social media monster that out-clicks the rest of the Web, including
-- and is even starting to claim some search engine space.
But can investors love Facebook when most of those 800 million users don't?
As Facebook goes public, poor customer satisfaction may make the social network its own worst enemy.
Almost every aspect of the service is scornfully picked apart -- game-related spam, privacy controls, hijacker apps and links and the stream of banal posts from "friends" about their kids' post-nasal drip, Zumba classes and all-caps rants about Obama and his ties to the Illuminati.
But that griping, so typical of any change to any site, has taken hold in customer satisfaction figures. When
was asked by
to assess brand satisfaction online, it found in May that 12.9% of 3,022 respondents thought Facebook was "excellent" in customer service and 25.9% thought it was "poor." That may not look so bad when taking into account that another 31.3% called it "good," but also doesn't look so good when 30% call it "fair."
By way of comparison, how did Google do? Better: 30.9% excellent, 42.7% good, 15.8% fair and 10.6% poor.
Facebook also does not fare well in the
, a national indicator of customer evaluations of goods and services among U.S. households. The index was founded at the University of Michigan's Ross School of Business.
"In 2010, Facebook debuted with an ACSI score of 64 -- the lowest of any measured website," an analysis of the data reads. (By comparison, Wikipedia scored 78, the best showing, followed by YouTube at 74.) "This year, Facebook makes a modest gain, up 3% to 66, even though -- or perhaps because -- its user numbers have exploded, reaching almost 1 billion. But considering Facebook's low user satisfaction, its current size dominance cannot be taken for granted in the future."
Facebook's pitiful showing over the past two years puts it in the bottom 5% of all measured private-sector companies and in the same range as perennially low-scoring airlines and cable companies.
"Facebook is a phenomenal success, so we were not expecting to see it score so poorly with consumers," says Larry Freed, president and CEO of
, which worked with ACSI on the data. "At the same time, our research shows that privacy concerns, frequent changes to the Web site and commercialization and advertising adversely affect the consumer experience. Compare that to Wikipedia, which is a nonprofit that has had the same user interface for years, and it's clear that while innovation is critical, sometimes consumers prefer evolution to revolution."
"They're in a situation where satisfaction is very important long term, but while there is not really a viable competitor it isn't going to change a whole lot of their business," he adds. "In other words, if you don't have any alternatives you are going to put up with the challenges."
Freed draws a comparison to America Online.
is another company that, years ago, early on in the measurement of the ASCI, their scores weren't very strong, but at the time they were pretty dominant. As alternatives came about they lost their way pretty quickly because they weren't doing a good job of meeting consumer's needs," Freed says.
Did someone say alternatives? While it's the invite-only
that has all the good buzz lately, the ACSI analysis has another one in mind.
"For companies that provide low levels of customer satisfaction, repeat business is always a challenge unless customers lack adequate choices, as in the case of near monopolies," it says. "It is possible that Facebook's gigantic user base in and of itself might provide a certain monopoly protection. The first test of this notion will probably come from ... Google+, a social networking service aimed at an audience similar to that of Facebook. If there is a battle for social networking preeminence between Facebook and Google, it will likely center on user satisfaction."
Freed calls Google+ an "interesting challenge to Facebook," but says the site is "not really a serious competitor until they get the network large enough to be viable. They are seeing great growth in adoption, but it still has to grow a whole lot more before people will abandon Facebook. But if they do become a viable competitor, Facebook is going to have some challenges because of their lack of satisfaction."
Google has taken a PR pounding lately, including as it tries to reduce dozens of product privacy policies down to a handful starting March 1 and is being called on by wary members of congress to answer questions, and Facebook might look better in comparison. ACSI figures coming this month and another Zogby poll in May will be telling.
But Facebook competitors smell blood in the water. The open, nonprofit network social media site
, still in development, has considerable buzz for its un-Facebook-like dedication to privacy and user controls. And
, a social network once given up for dead, is once again gaining momentum with a gaming focus. Tumblr, with its constantly refreshing stream of content, is thus far mostly a youthful addiction, but could broaden its audience.
and the business-focused
have carved out markets that can either ultimately supplement Facebook or replace it, user by user.
Flying under the radar are niche social networks, many of them added features to specialized Web sites.
"I think the niche social media networks could be, and are in some cases, very powerful," Freed says. "I saw a stat when Facebook hit the 500 million members that there are another 500 million members of niche social networks as well. They might be as small as fly fishing enthusiasts, but now you've got people who are there for exactly the same reason and their interests are aligned and all that."
These sites, and other upstarts, may want to start rooting for Google.
"I think if Google+ does create some fragmentation in the network, it will open the door to others," Feed says. "They will all look for a unique way of looking at the world to try to entice people to come over. In general, one of the great values of Facebook is that everybody is on it. As it gets fragmented, the whole value of their social network is going to decline."
--Written by Joe Mont in Boston.
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