Facebook Wants To Make Your News Feed More Friendly: Here’s What That Means For Everybody

Who can complain about troll disempowerment, more meaningful social interactions, and time better spent? Wall Street can.

Facebook Inc (NASDAQ: FB)’s upcoming News Feed updates inspired a 5.6-percent pullback in the stock and forfeited analyst confidence.

What The Changes Mean

The new strategy will involve deprioritizing the posts of businesses and publishers, which could threaten engagements and stunt ad revenue. It might also bear negative implications for Facebook, itself.

Management concedes that it’s essentially taking one for the team.

“By making these changes, I expect the time people spend on Facebook and some measures of engagement will go down,” CEO Mark Zuckerberg wrote in a Thursday post. “But I also expect the time you do spend on Facebook will be more valuable.”

Zuckerberg professed optimism that the shift will ultimately improve Facebook’s performance. “If we do the right thing, I believe that will be good for our community and our business over the long term too,” he added.

What Analysts Say

Analysts were less enthused. Considering that average usage is already declining, Pivotal Research reiterated its Sell rating and forecasted 18-percent price plunge.

“It’s hard to say how much this will impact usage,” Pivotal analyst Brian Wieser told Benzinga. “I characterize it as a headwind on revenue. Unclear if or to what degree it will impact revenue negatively.”

However, while asserting near-term risk to growth, Wieser affirmed in a note that the …

Full story available on Benzinga.com

Source-Click here

Leave a Reply

Your email address will not be published. Required fields are marked *