( Reuters) — Shares of Facebook fell 4 percent on Friday after Chief Executive Mark Zuckerberg announced changes to the platforms 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 Nielsens digital consumption rates showed that usage was already falling prior to Zuckerbergs announcement, although from very high levels. We can speculate that the concerns reflected in Zuckerbergs post may very well have been driving these declines, Pivotals Brian Wieser wrote in a note. The company has been criticized for algorithms that may have prioritized misleading news and misinformation in peoples feeds, influencing the 2016 American presidential election as well as political discourse in many countries. While Facebooks 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. ( Reporting by Aishwarya Venugopal in Bengaluru; editing by Patrick Graham)
Facebook shares fell around 5 percent on Friday following the news that the company would retool its News Feed to boost social interactions over stories from publishers. Mark Zuckerberg announced the news on Thursday evening in a post on his own Facebook page to expected investor skittishness. I want to be clear: by making these changes, I expect the time people spend on Facebook and some measures of engagement will go down, Zuckerberg admitted. But I also expect the time you do spend on Facebook will be more valuable. And if we do the right thing, I believe that will be good for our community and our business over the long term too. Shares opened on Friday around $178, a sharp fall from the previous days high of around $188. Shares had perked back up to $181 at the time of writing. While the fall is notably tied to Thursdays big news of a shift in mission, shares didnt reach monthly low levels around $171, where Facebook traded in early December. As Zucks comments make clear, the dip doesnt come as a surprise. Still, investors are likely to keep watch of the stock as the platform actually implements the major philosophical changes it says are underway. Facebook has pursued growth relentlessly ever since it debuted as a public company in 2012, and its formula works. The company recalibrates its legendary algorithms behind the scenes in order to boost engagement, its key metric, at all costs — at times at the expense of its users. As 2017s scandal over fake news and Russian disinformation on the platform demonstrated, theres a dark side to Facebooks eerily potent social formulas, and one it will need to answer for in 2018 if it intends to chart a sustainable future.