There’s a term they use in Hollywood to describe the precise moment when an original series or a franchise runs out of ideas and must resort to shameless stunts to stay relevant. It’s called “jumping the shark” after a late “Happy Days” episode in which director Ron Howard, in a desperate attempt to retain viewers, had the Fonz don water skis and launch himself over a shark. It’s also a concept that Facebook is now all too familiar with.
This week, Mark Zuckerberg and company strapped on their finest pairs of skis and got some massive air when they announced that Facebook will now allow users to start gambling with real money instead of virtual credits. The executives of Facebook are hoping the move will generate enough buzz to pull the company out of its steady tailspin, but from where we’re sitting it’s hard to see the decision as anything more than a death knell for the once-great social network.
Fame, as they say, is a fleeting thing, and this has been a particularly tough quarter for Facebook. After acquiring Instagram, the uber-popular hipster photo app, for $1 billion and going public with one of the biggest IPOs the tech industry has ever seen, Facebook has spent the summer hemorrhaging money and losing users. Stocks which opened at $38 a share now trade for $21. The tremendous growth that was supposed to net Facebook 1 billion users by the end of this month has stalled. To make things worse, a recent report discovered that a staggering 83 million of the social network’s 955 million profiles are actually fakes or duplicates.
But will allowing users to gamble away their savings on “Bingo & Slots Frienzdy” change anything? Probably not. Looking back, decisions like these are part of the reason why Facebook is experiencing so many woes in the first place. A victim of its own explosive growth, the social network never really took the time to refine its product, like Apple routinely does. Instead, in an effort to be everything to everyone, Facebook has opened its doors to any and all developers. The network that used to embody hipness and youth has turned into a breeding ground for spammy ads, buggy games and malware. Oh, and grandmas love it for its baby photo sharing capabilities.
In order to stay relevant, Facebook needs to be cool again. Gambling apps, such as “Friendzy” from Gamesys, aren’t cool. They don’t offer the high-stakes poker and blackjack games that are so popular lately. These slot and bingo games feature low-budget cartoon puffballs. The only demographic that kind of business model will attract is the one that’s already plinking away its money on credits for Zynga games.
Speaking of money, it’s unlikely that the cash flow Facebook will receive from gambling apps is going to do much to fill its coffers. Its pay-for-play Facebook credits haven’t exactly been setting the world on fire, and even though the network will get a 30% cut of all developer earnings, it’s unlikely that enough people will be gambling to significantly move the revenue needle. Due to strict U.S. gambling regulations, the apps are currently being offered exclusively in the United Kingdom. That puts a big damper on the projected $100 billion a source predicted Facebook could earn by becoming an online casino for American users.
So will a few childish gambling apps be enough to save Facebook? We’d be lying if we said yes. In the end, opening the platform to this dangerous hobby is just another jump over the proverbial shark tank. Gambling isn’t going to attract a flock of new users, and it isn’t going to generate enough revenue to pull the social network out of its cavernous financial hole. Facebook’s reign as the king of social media is over. It just doesn’t know it yet.