Shares of Facebook Inc fell more than 4 per cent on Friday after CEO 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.
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.
A warning by Zuckerberg that people could spend less time on Facebook in the short term as a result of the changes sent the company’s stock $8.40 lower to $179.37.
‘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 content.
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 firms.
‘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.’
Posts from businesses, brands and media will be made less prominent in an effort to help users have ‘more meaningful social interactions.’
Zuckerberg announced the changes in a sweeping Facebook post on Thursday, saying it was the first in a series of changes in the design of the world’s largest social network.
Facebook has already started changing the way it filters posts and videos on its centerpiece News Feed to prioritize content from friends and family of the user.
For example, a family video clip posted by a spouse will be deemed more worthy of attention than a snippet from a star or favorite restaurant.
But experts claim this is just another money-making scheme for the site, pushing companies to buy more adverts to get user attention.
‘As we roll this out, you’ll see less public content like posts from businesses, brands, and media,’ Zuckerberg said in a post at his Facebook page.
‘And the public content you see more will be held to the same standard – it should encourage meaningful interactions between people.’
The company has for years prioritized material that its complex computer algorithms think people will engage with through comments, ‘likes’ or other ways of showing interest.
Zuckerberg said that would no longer be the goal.
‘I’m changing the goal I give our product teams from focusing on helping you find relevant content to helping you have more meaningful social interactions,’ Zuckerberg said.
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.
However, Zuckerberg said it would be better for users and for the business over the long term.
Facebook and its social media competitors have been inundated by criticism that their products reinforce users’ views on social and political issues and lead to addictive viewing habits, raising questions about possible regulation and the businesses’ long-term viability.
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.
Last year, Facebook disclosed that Russian agents had used the network to spread inflammatory posts to polarize the American electorate.
Congress is expected to hold more hearings this month, questioning the role social media platforms like Facebook, Twitter and Alphabet’s YouTube play in spreading propaganda.
Zuckerberg said an overhaul of the company’s products, beginning with changes to the algorithms that control the News Feed, would help to address those concerns.
Similar changes will be made to other products in the coming months, he said.
‘We feel a responsibility to make sure our services aren’t just fun to use, but also good for people’s well-being,’ Zuckerberg said.
With more than 2 billion monthly users, Facebook is the world’s largest social media network. It is also among the world’s largest corporations, reporting $36 billion in revenue, mostly from advertising, during the 12 months that ended on September 30.
A shift away from non-ad content produced by businesses is a potentially severe blow to news organizations, many of which use Facebook to drive readership, but Zuckerberg said many such posts have been unhealthy.
‘Some news helps start conversations on important issues. But too often today, watching video, reading news or getting a page update is just a passive experience,’ he wrote.