Stock Review: A Look At Facebook (NASDAQ FB) Addiction

864 million people get on Facebook each day to combat the momentary negative feeling of boredom with positive stimulus, according to recent studies. In the book “Hooked: How to Build Habit-Forming Products,” author and entrepreneur Nir Eyal, a Stanford Graduate Schoold of Business lecturer, notes that when people get momentarily board, taking a little break during the day to see how family and friends are doing stimulates their mind.

Boredom, it turns out, is a painful emotion. When someone can break their pain by visiting Facebook, as 864 million people per day do, this creates a habit that results in a $200 billion valuation.

In an interview with Business Insider, Eyal explained Facebook’s core value proposition. “What Facebook wants to create an association with is every time you’re bored, every time you have a few minutes. We know that, psychologically speaking, boredom is painful. Whenever you’re feeling bored, whenever you have a few extra minutes, this is a salve for that itch.”

Facebook Inc: FB is Addictive

The book focuses on how products can “hook” users in a similar way, and points to the winners in business not always being the best at producing a product. “The cold truth is that the best products don’t always win,” Eyal said in the interview. “Many times it’s the products that have the ability to keep users coming back and using them without conscious thought and using them out of habit, are the ones that keep us coming back.”

To create a product that keeps people coming back, as Facebook Inc (NASDAQ FB) has, it requires an investment on the customers part. Every friend they add to their list, every like, every comment, is a commitment that builds user loyalty. When people post and that post is liked, like Pavlov’s dog, users associate Facebook with positive emotions.

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Facebook Inc (NASDAQ FB) Business News

When Facebook sends email informing you that someone has liked your post, or that a friend has updated their profile or posted a new photo, said another way those interactions are viewed as psychologically positive feedback. That’s not spam email when they send it, that is viewed as positive emotional stimulus.

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