Reports: Facebook Misled Investors As It Lost Young Users

Facebook allegedly misled investors and masked slowing growth among critical demographics like young users in the US, according to The NY Post citing internal documents leaked by whistleblower Frances Haugen.

The documents show that young people are generally spending less time on Facebook, fewer teens are signing up and many new teen accounts are duplicates as opposed to unique new users, Bloomberg reported Monday.

People across age groups are also creating fewer posts, and it’s unclear to Facebook employees why all this is happening, Bloomberg said, citing Facebook’s internal research.

And while Facebook has internally studied its declining popularity among young users, it’s been fairly mum on the subject in official communications with investors, the report said, an allegation that forms the basis of Haugen’s whistleblower complaint that Facebook “has misrepresented core metrics to investors and advertisers.”

Teenagers and young adults are key demographics in the advertising market as companies seek to build relationships with people before they hit their peak income and spending levels.

The documents were among the tens of thousands of pages of internal reports at the company leaked by Haugen, a former employee. The internal reports formed the basis of Haugen’s formal whistleblower complaint with the Securities Exchange Commission and were handed over to the agency and to Congress, Bloomberg said.

While Facebook’s challenges recruiting teen users onto its platform have been previously reported, the new documents reportedly show that a cohort of slightly older, “young adults” has been on the decline for almost a decade, as well.

The documents cited by Bloomberg included, among other things, a chart showing that US teenagers’ “time spent” on Facebook was down 16 percent this year compared with 2020.

A series of slides also showed that young people were taking much longer to create their first Facebook account that they did previously.

Most people born before 2000 created a Facebook account by age 19 or 20, the internal research said, but people born later aren’t expected to join the social network until they’re around 24 or 25, if ever, Bloomberg reported.