Facebook has erased most of its year-to-date gains in pre-market trading as investors see CEO Zuckerberg’s decision to shift news feeds to personal posts and away from businesses and media outlets
creating a risk to the company’s financial performance.
Zuckerberg’s decision to shift news feeds to personal posts and away from businesses and media outlets
Facebook is 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.
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.
“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.”
As Bloomberg points out, the changes promised today 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.
A large part of brands and media companies’ strategies is to post articles and videos from their pages to engage consumers — items that aren’t considered “meaningful interactions” between people. Downplaying those posts from brands and businesses may put revenue at risk, said James Cakmak, an analyst at Monness Crespi Hardt & Co.
“There will be less opportunity to expose Facebook users to brands,” Cakmak said.