Facebook shares slip after News Feed overhaul

FILE PHOTO: A giant logo is seen at Facebook's headquarters in London, Britain, December 4, 2017. REUTERS/Toby Melville

PHOTO: A giant logo is seen at Facebook’s headquarters in

(Reuters) – Shares of Facebook Inc fell 4 percent on Friday after
Chief Executive Mark Zuckerberg announced changes to the
platform’s centerpiece News Feed that he said would hit user
engagement in the near term.

Zuckerberg said on Thursday the company would change the filter
for the News Feed to prioritize what friends and family share,
while reducing the amount of non-advertising content from
publishers and brands.

If the premarket declines in shares hold, Facebook stands to lose
nearly $23 billion from its market capitalization on Friday as a
result of the move.

Pivotal Research Group said its analysis of Nielsen’s digital
consumption rates showed that usage was already falling prior to
Zuckerberg’s announcement, although from very high levels.

“We can speculate that the concerns reflected in Zuckerberg’s
post may very well have been driving these declines,” Pivotal’s
Brian Wieser wrote in a note.

The company has been criticized for algorithms that may have
prioritized misleading news and misinformation in people’s feeds,
influencing the 2016 American presidential election as well as
political discourse in many countries.

While, Facebook’s advertising would be unaffected by the changes,
the shift was likely to mean that the time people spend on
Facebook and some measures of engagement would go down in the
short term, Facebook said.

It may also have an impact on major suppliers of news and other

John Ridding, the chief executive of the Financial Times, warned
on Friday that the domination of online advertising revenue by
search and social media platforms was putting pressure on media

“The FT welcomes moves to recognize and support trusted and
reliable news and analysis. But a sustainable solution to the
challenges of the new information ecosystem requires further
measures,” he said.

“In particular, a viable subscription model on platforms that
enables publishers to build a direct relationship with readers
and to manage the terms of access to their content.”

(Reporting by Aishwarya Venugopal in Bengaluru; editing by
Patrick Graham)

Source: Technology – Google News

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