Does Facebook Know What You Want More Than You Do?
Most of Facebook's 1.2 billion monthly average users engage the service in much the same way: a quick and easy means of telling family and friends about their day, sharing some event or story that caught their attention, what's happening with the kids, and other personal tidbits. It's those capabilities that helped drive Facebook's rapid user growth around the world.
But that's merely what users think they want. Turns out Facebook, at least in the minds of its senior management, actually knows what's best for us, regardless of what we might think. It's becoming more evident with each passing day that Facebook is determined to change the user experience -- whether the change is welcome or not.
Don't confuse with me facts -- my mind's made up
It was March of this year when Facebook CEO Mark Zuckerberg, in discussing changes to the News Feed, said, "We want to give everyone in the world the best personalized newspaper in the world."
Why the change? Because the current iteration of Facebook is lacking "quality" posts. Earlier this month, Facebook announced plans for another update to News Feed, based on surveys that concluded users really want more "high quality" content. So, we can expect to see more links to articles on News Feed that will be based on usage patterns. In other words, Facebook is tapping into its most valuable asset -- mounds of data -- to drive what Facebook users' News Feeds look like.
The shift to becoming the best newspaper in the world based on an individual's usage sounds fine... except for a couple of things.
What is Facebook thinking?
First and foremost, the changes to News Feed are about advertising revenue. That's not a bad thing for investors since that's Facebook's bread and butter, and the reason its stock price is north of $50 a share is because of its emphasis on using data to determine what'll work for its advertisers.
As it happens, what Facebook considers high-quality information on its News Feed isn't the post of your cat hanging from the window sill, as cute as the picture might be. What users consider interesting doesn't have the same impact on Facebook's closely monitored click-through rates; they're low quality. In other words, that cat picture doesn't drive the same click-through rates as articles do.
The changes to News Feed, including August's tweaks to the algorithm used to drive what users see, are slowly changing Facebook from what we've grown accustomed to and into what Zuckerberg and crew think is best for us. Not only does that just feel wrong, there's a risk of it eroding Facebook's MAUs, and its 728 million daily average users, or DAUs. How will users feel getting inundated with what Facebook thinks will interest us?
Final Foolish thoughts
Today's SEC filing announcing Facebook's additional stock offering of 70 million shares, due in no small part to Zuckerberg's massive tax bill following the exercise of options, will get a lot of press and may put pressure on its stock price. But that's merely a near-term blip. Over the long haul, Facebook's determined efforts to change the user experience, regardless of what users themselves want, is what investors should keep an eye on.
Holding on to its massive user base -- especially when alternatives like Twitter are pushing hard to steal online advertising dollars -- should be high on Facebook's to-do list. And force-feeding changes driven solely by click-through rates is an awfully fine line to traverse. For investors, better click-through rates are going to translate into increased revenue -- and that's obviously good. But if improved advertising results cost Facebook users, the trade-off may not be worth it.
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The article Does Facebook Know What You Want More Than You Do? originally appeared on Fool.com.
Fool contributor Tim Brugger has no position in any stocks mentioned. The Motley Fool recommends Facebook and Twitter. The Motley Fool owns shares of Facebook. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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