Facebook's News Feed change wiped out $25 billion - but it could be good for the company in the long run (FB)

markets.businessinsider.com | 1/12/2018 | Seth Archer
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Facebook announced major changes to its platform, which will refocus the News Feed on content from friends and family.

Advertisers and investors were worried about how the changes would affect advertisements and revenue.

Company - Shares - Trade - Time

Watch the company's shares trade in real time here.

Facebook said on Thursday it would be adjusting its primary newsfeed to focus more on content from friends instead of publishers, a decision that wiped close to $25 billion off the company's market capitalization on Friday.

Speculation - Impacts - Move - Stock - Move

Speculation about the financial impacts of the move was immediate and plentiful, but despite the stock move, most Wall Street analysts agreed it will ultimately be good for the company.

Facebook gets a vast majority of its revenue from advertising on its platforms. Any change in Facebook's News Feed could potentially affect its ability to sell advertisements against the feed, which is likely what initially spooked investors and sent shares tumbling. Facebook ended the day about 4.2% lower on Friday.

Company - Email - Media - Partners - Changes

The company later sent an email to its media partners that explained the changes in a bit more detail. The company told publishers that their pages may see a decline in organic reach but that posts that start meaningful conversations will be less affected by the changes. It also said you won't be able to throw money at clickbait posts to buy reach.

Once analysts had a chance to digest the news, many came around to the potential benefits, but said near-term uncertainty will likely remain as the company enters its quiet period before reporting earnings on January 31.

View - Feed - User - Growth - Time

"In our view, making the feed more relevant should boost user and engagement growth over time," Mark Mahaney, an analyst at RBC Capital Markets, wrote in a note to...
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