Is Facebook Harmful to Your Health and Wallet?
Many people consider Facebook (NASDAQ:FB) to be a convenient way to keep in touch with friends and family, post pictures and even sneak a peek at old classmates. Now, the social media company is being seen as a catalyst for weight gain and debt.
Keith Wilcox and Andrew Stephen, researchers at Columbia Business School and University of Pittsburgh, recently conducted a study that found keeping close ties with good friends on Facebook correlates with a higher body-mass index and higher amount of credit card debt. This is accomplished by users feeling a self-esteem boost after monitoring close friends’ activities, even for just five minutes. The momentary gain in self-esteem then reduces a person’s self-control in vulnerable areas of life such as diet and finance.
The report explains, “People use social networks to fulfill a variety of social needs, including self-expression and self-presentation. Consequently, using a social network can enhance self-esteem and positively affect well-being. We propose that while social network use does make people feel better about themselves, these increased feelings of self-worth can have a detrimental effect on behavior. We argue that, because people care about the image they present to close friends on social networks, social network use enhances self-esteem in users who are focused on close friends while browsing their social network. This momentary increase in self-esteem reduces self-control, leading those focused on strong ties to display less self-control after browsing a social network compared to not browsing a social network.”
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While the study may be troubling news for Internet users, it is very like-able for Facebook’s bottom line. The company reported third quarter revenue of $1.26 billion in October, with 86 percent of sales coming from advertising. Major Facebook clients include companies such as Wal-Mart (NYSE:WMT), Ford (NYSE:F) and Disney (NYSE:DIS).
Facebook continues to grow its online presence through mobile apps for Apple’s (NASDAQ:AAPL) iOS and Google (NASDAQ:GOOG) developed Android. As of the end of September, Facebook attracted more than 1 billion monthly active users, representing an increase of 26 percent year-over-year. It also looks set to help users spend more money by launching a new service called Gifts. As the name suggests, it enables users to buy, give and ship real gifts to friends directly through Facebook. Gifts can be given from the birthday reminders news feed, or from a person’s timeline.
Consequently or not, depending on your views on correlation and causation, the Facebook effects found in the study and the social giant’s growing user base have been echoed in recent economic data. According to the Thomson Reuters/University of Michigan index on consumers, sentiment is at its highest level in five years. Meanwhile, the Commerce Department announced on Monday that consumer spending increased 0.8 percent in September, its largest increase since February.
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