Facebook Changes Could Mean Less Time Spent on Site; Shares Fall
Facebook Changes Could Mean Less Time Spent on Site;
Shares Fall
News feed to prioritize friends and family posts, not
brands
CEO Zuckerberg says users may spend less time on the site
By Selina Wang January 11, 2018, 4:49 PM PST Updated on
January 12, 2018, 7:00 AM PST
Facebook Inc. said it’s making major changes to its
flagship social network, shifting users’ news feeds back toward posts from
friends and family and away from businesses and media outlets -- a transition
that is likely to mean people spend less time on the site. The shares tumbled
the most in more than a year.
In a post Thursday, Chief Executive Officer Mark
Zuckerberg said community feedback has shown that public content has been
“crowding out the personal moments that lead us to connect more with each
other.” The goal of the product teams will be to help Facebook’s more than 2
billion monthly users find content that will lead to more meaningful social
interactions, he said.
Facebook and companies from Twitter Inc. to Apple Inc.
have been confronting a mounting public backlash against technology and social
media, as the public grapples with a constantly connected life in which they
are exposed to fake or biased news, cyber bullying and even internet addiction.
Zuckerberg’s vision for Facebook has always been a platform for giving people a
voice and a place to make meaningful connections, though he spent much of last
year on the defensive.
"By making these changes, I expect the time people
spend on Facebook and some measures of engagement will go down,"
Zuckerberg wrote. "But I also expect the time you do spend on Facebook
will be more valuable. And if we do the right thing, I believe that will be
good for our community and our business over the long term too."
Facebook’s shares fell as much as 5.5 percent, the most
since November 2016, to $177.40. They were trading down 4.1 percent at 9:45
a.m. in New York.
Last week, Zuckerberg said his resolution for 2018 was to
"fix" the social network he co-founded. His vow followed a year that
saw Facebook come under sharp criticism for contributing to a climate of
extreme political polarization, the distribution of fake news and escalating
privacy concerns. Last year, lawmakers berated Facebook, Alphabet Inc.’s Google
and Twitter for failing to prevent Russian manipulation on their platforms
during the 2016 U.S. presidential election.
"This is recognition of the issues they’ve faced
with toxic content," said Brian Wieser, an analyst at Pivotal Research
Group. "People are frustrated with the Russia revelations and fake news
and have taken it into their own hands and stopped engaging."
The Menlo Park, California-based company has kept revenue
growing by consistently selling more advertising in its news feed, striking
partnerships with media companies to distribute their stories, and including
more video postings, which draw higher ad rates. Facebook’s latest changes
don’t impact ads -- only business and media-oriented content posted by pages
and other people, according to a person familiar with the matter.
European Union competition chief Margrethe Vestager said
Friday that allowing advertisers to tailor political content to personal tastes
on social media such as Facebook is a danger to democracy, according to
interview in Vienna’s Der Standard newspaper.
In a note earlier this week, Wieser reported Nielsen data
showing that in September -- the most recent month for which this data is
available -- core Facebook consumption failed to grow year-over-year for a
second consecutive month.
"Facebook is already experiencing declines in
consumption and the company is responding with these changes today,"
Wieser said. "Good on Facebook -- they are doing the right thing,
long-term. It may not be good for the business in the short term."
Facebook’s popularity and user growth have skyrocketed
since its founding in 2004, when it was a sort of online scrapbook and bulletin
board for college students. In the company’s early years, the news feed was a
scrolling update about the personal activities of friends and family members.
Months before the company went public in 2012, Facebook started featuring
"sponsored story" ads in users’ feeds, and it rolled out mobile
advertising that same year. Since then, annual sales have soared from $5.1
billion to an estimated $40.2 billion last year -- and the news feed has become
increasingly crowded with advertisements and posts from brands and
publications.
The changes promised aren’t entirely new -- Facebook has
been shifting the content on its news feed toward posts from friends and family
and away from brands and publications for more than a year. With the latest
change, Facebook’s algorithm will prioritize posts that spark back-and-forth
discussion or inspire people to share and react. That means posts like a friend
asking for advice, recommendations for a trip or an article that prompts
interaction, according to a post by Facebook’s head of news feed, Adam Mosseri.
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