What Happened
Facebook Inc FB announced updates to its News Feed rankings to promote content from family and friends over the public and prioritize posts “that spark conversations and meaningful interactions” rather than posts with more activity.
Why It’s Important
This means Facebook will deprioritize posts from publishers and businesses, risking their ad-related revenue.
“As we make these updates, Pages may see their reach, video watch time and referral traffic decrease,” Facebook said in a Thursday announcement. “The impact will vary from Page to Page, driven by factors including the type of content they produce and how people interact with it. Pages making posts that people generally don’t react to or comment on could see the biggest decreases in distribution.”
As the Wall Street Journal put it, the firm will “rank journalism outlets by credibility.”
Conversation-driving content will appear higher in the feed, a feature that favors controversial coverage, live videos, posts about sports and TV shows, and content from creators and celebrities. Facebook said it will monitor and demote “engagement-bait” content.
Notably, management expects visitor time to decrease as their searches for valuable interactions are streamlined.
What’s Next
The extent of loss to Facebook’s user time and the responses of publishers and businesses to the revenue risk are soon to be seen.
The Street reacted to the news with a 4.3-percent sell-off in Friday's pre-market session, while Twitter Inc TWTR popped 3.2 percent.
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