Facebook’s new policy could cost it $23 billion in market value

When Facebook recently announced its plan to emphasize more on “meaningful” interactions on the platform, shares of Facebook fell more than 4 per cent on 12 January. It also sent the company’s stock $8.29 lower to $179.47.

by exchange4media Staff
Published - Jan 15, 2018 8:58 AM Updated: Jan 15, 2018 8:58 AM

The recent announcement by Facebook to limit its news content and focus more on shared content could cost the social media giant some big dollars. 
When Facebook recently announced its plan to emphasize more on “meaningful” interactions on the platform, shares of Facebook fell more than 4 per cent on 12 January. It also sent the company’s stock $8.29 lower to $179.47.
According to some estimates, if the stock closes at that level it can shrink the company’s market value by $23 billion, which is more than the total market value of rival Snap Inc, the owner of Snapchat. 
The announcement could also result in Zuckerberg losing $3.3 billion of his own personal net worth.
The new Facebook policy may sound relatively a small change, but it’s likely to have significant consequences for the broad subset of Facebook users that aren’t individual people: media companies, small businesses, big brands, and everyone else who has come to see Facebook’s News Feed as an essential way to reach audiences and customers.
In a recent post, Facebook CEO Mark Zuckerberg said the pages managed by those businesses are likely to reach far fewer people in 2018. “As we roll this out, you’ll see less public content like posts from businesses, brands, and media,” he wrote. “And the public content you see more will be held to the same standard -- it should encourage meaningful interactions between people.”
"One of our big focus areas for 2018 is making sure the time we all spend on Facebook is time well-spent. We built Facebook to help people stay connected and bring us closer together with the people that matter to us," Zuckerberg had stated in his post.

The CEO said Facebook has got a feedback from the community that public content - posts from businesses, brands and media - is crowding out the personal moments that lead us to connect more with each other.
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With its stock up 48 percent over the past 12 months, Facebook has been a major driver of a technology rally that has propelled the S&P 500 to record highs. Its revenue is expected by analysts on average to have surged 45 percent in 2017, a rare accomplishment for a company of its size.

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