I predicted in January that Facebook would "hit its limit. I predict some more ad snafus a la Beacon, and the 3rd party apps become overwhelming and all-too-reminiscent of MySpace.", and today the Sillicon Alley Insider predicts a Facebook decline: For some early users, the thrill is gone. Our campus correspondent described how Facebook lost its appeal as soon as it tried to become everything to everyone, and we've seen evidence of declining usage in Comscore stats. The result has been less usage from the once-core user base.
For some geriatric users (a.k.a., us), the thrill has never really been there. Having been raised on email and IM, it's hard to get in the habit of visiting a specific site to figure out what everyone's up to, especially when email accompanies us wherever we go.
The company has yet to figure out a truly compelling business model. [...]
Most importantly, the "walled garden" social networking model--a single site that retains all your information and relationships and forces you to do most of your business inside it--could be analogous to the 1990s AOL: Amazing industry leader for the first few years, ossified, flawed model for the rest of time.
The Alley recommend reviving a better Beacon as a compelling ad-revenue based business model, but Facebook will have to tread lightly with that, and any privacy invasive technology to avoid annoying the userbase. It's not time for the I-told-you-sos yet; though. Fb could still find some key ways to win over its diverse user groups and become a "killer app" -- or at least a new approach to the old "portal" style dashboard webpages, updated and improved as a node for other web 2.0 traffic (I already pipe my blog entries into its notes system and my twitters into my Facebook Status updates, for example).