Zuckerberg said in the post yesterday that he wanted to change the way Facebook ranks posts by putting more weight on social interactions and relationships. Since there's more public content than posts from your friends and family, the balance of what's in News Feed has shifted away from the most important thing Facebook can do-help us connect with each other. The move seeks to encourage more meaningful interactions between users and their friends and online contacts.
Mr Zuckerberg said he expected people to spend less time on Facebook as a result of the changes - a frank admission from a business leader - but predicted it would boost the company in the long term. "But I also expect the time you do spend on Facebook will be more valuable". Forcing tech CEOs like Zuckerberg to justify the unjustifiable, in public-without the shield of spokespeople or PR spin-would go a long way to puncturing their carefully preserved cults of personality in the eyes of their employees.
According to some analysts, the measure won't drag Facebook down due to its strong monetization, formed by a monthly active user (MAU) base of more than 2 billion. "But those are the people who want to see ads".
Facebook had been doing just that.
Yes, Zuckerberg has already announced changes, such as favoring interaction with family and friends over businesses.More news: Assassin's Creed: Rogue Remastered Coming to PS4 and Xbox One
But the new algorithm could put an end to that trend.
He called it a win-win for Facebook, users and companies like his, as it will likely increase the incentive for marketers to spend, and push up quality and trust for users. And time spent watching videos meant less time scrolling and fewer ad impressions. The company is set to report earnings on January 31.
I have nothing against babies but I don't want them in my Facebook feed. Meanwhile, Facebook shares fell as much as 4% after the announcement.
There have also been complaints that the news feed - a stream of messages, photographs and videos - increasingly features posts from companies rather than friends. The average price per impression climbed 35% last quarter. But businesses that use Facebook to connect with their customers without paying for ads will also feel the pain. If users pay more attention to advertisements in their feeds following the upcoming changes, those returns may improve further, prompting advertisers to pay even more per impression.
The news has left publishers uncertain about the impact it may have on their businesses, especially as many have pivoted to video and have relied on Facebook to rack up those coveted views.More news: Dark Souls Remastered Confirmed For Nintendo Switch
But Facebook's sweeping change on Thursday means none of that content will be able to break through. The long-term positives of providing a more unique and relevant product could result in better user retention and keep users coming back more often.
The changes will roll out over the next couple of months across all platforms.
Motley Fool co-founders Tom and David Gardner have spent more than a decade beating the market. If you're a publisher or brand on Facebook, you're hosed.
Adam Levy has no position in any of the stocks mentioned.
Shares of Menlo Park, California-based Facebook tumbled 4.5 per cent on Friday in NY, cutting Zuckerberg's fortune to US$74 billion on the Bloomberg Billionaires Index.More news: Wendy Williams Had Some Harsh Words For Kylie Jenner And Travis Scott
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