Facebook Stops Growing

Social web king, facebook.com, has seen it’s first ever drop in monthly users according to analytics firm Nielsen Online.

Almost half a million users who visited the site in January 2008 didn’t bother to return in February. Competing sites like Bebo.com and Newscorp’s MySpace have reported similar drops in traffic.

So far Facebook has been able to find investors, and justify their massive spending (In the coming year Facebook plans to spend US$ 200 million on servers alone) with their rapid growth. The end of the growth cycle will increase the pressure on facebook to find a way to turn their popularity into a viable revenue stream.  Facebook’s advertising platform, which allows advertisers to target extremely specific customers, has so far met with a tepid response.

At the peak of the excitement, Facebook was collecting almost 200 thousand new users a day, and Microsoft spent US$ 250 million buying 1.6% of the company – a deal that valued Facebook at $15 billion.

Todays news suggests that those frothy days may be over.