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Facebook's Rejiggered News Feed: The Ads Have It

Facebook's Rejiggered News Feed: The Ads Have It

Facebook is calling its redesigned News Feed a "personal newspaper," and one thing that's already clear is that this newspaper will carry plenty of ads. They'll be highly targeted, presumably drawing more enthusiasm from advertisers and less annoyance from users. The new design also could help Facebook fend off Twitter, Google+, Tumblr, Pinterest and all the other networks breathing down its neck.

By Peter Suciu
03/09/13 5:00 AM PT

Facebook unveiled its new look this week, providing bigger photos and more links in users' News Feeds, along with additional ways to view specialized streams based on topics of interest, such as music. This is apparently an attempt to corral all the random musings and disjointed pictures users are accustomed to sorting through. Facebook's move seems geared toward bringing order to the chaos.

Facebook's Redesigned News Feed
Facebook's Redesigned News Feed

There is a lot at stake in the redesign. Facebook has been on a rocky road since its high-profile yet underperforming IPO last May.

"Whether users like this or not has yet to be seen," said industry analyst Chris Silva of Altimeter Group. "There are still many users who may complain, but that's all."

There is a difference between what Facebook users say and what they do, he pointed out.

Even if the new design should trigger outrage -- and there's no reason at this point to assume that it will -- it probably wouldn't lead to a massive exodus, Silva told the E-Commerce Times.

Streaming News

As the largest social media site online, Facebook tries to be an all-in-one service that delivers everything to its users. That can be problematic, given the impossibility of pleasing all the people all the time. The question now is whether its new News Feed will satisfy the masses over the long haul, or whether it is just a short term solution for a larger problem -- simple fatigue with the social network.

"Facebook's new 'personal newspaper' ... has a sort of Back to the Future ring to it," said Charles King, principal analyst at Pund-IT.

"From the very beginnings of the commercial Internet, companies tried various schemes to 'capture as many eyeballs' as possible by providing access to interesting and attractive content and thus increase their own value as conduits for advertisers," he observed.

"ISPs, including AOL, Yahoo, MSN and many others, included customizable news feeds as part of their home pages, and still follow that model as a means of user cultivation and retention," King told the E-Commerce Times.

From the Social to the Ad Network

Fundamentally, Facebook is looking to create a way to facilitate targeted advertising in users' News Feeds through mechanisms that will tailor them to suit particular interests. Do user interests include more advertising, though, personalized or not? The aggressive display of ads was one of the things that contributed to MySpace's loss of popularity several years ago.

"They won't suffer the same fate as MySpace," said Silva, "but it still comes down to whether users will be captivated by this new design."

What this move could do is help Facebook where it needs it most -- namely in the mobile space, where it has failed to impress.

"This is a good move for advertisers," Silva added.

Social Hub

Drawing hundreds of millions of visitors to its site every day doesn't automatically translate into profit, as Facebook knows too well. As a public company, it must keep that goal front and center with every change it makes.

"Facebook is going at it a bit ass-backwards," said King, by "adding content, including personalized news feeds, that it hopes will obviate the need for regular users to visit other sites and so stay constantly connected to Facebook.

"You could say that rather than trying to 'capture eyeballs,' the company is attempting to cultivate 'captive eyeballs,'" he remarked. "Whether this will increase the success and valuation of Facebook [through] ad revenues or simply result in compliant users suffering a sort of online Stockholm syndrome is anyone's guess."


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