INVESTOR’S BUSINESS DAILY
BRIAN DEAGON 4/08/2016
In what could be a nightmare scenario for Facebook (FB), users are feeling weary about posting personal reflections and updates on their daily lives.
A report published by The Information Web news site says Facebook is trying to reverse a double-digit decline in “original” posts by users, items about their personal lives for friends to see. The decline is a long-term threat to Facebook’s primary moneymaker, the central portion of its website, called News Feed, where user posts appear — and which is infused with ads. The report said personal posts were down 21% from mid-2014 to mid-2015. Overall sharing reportedly fell 5.5% during that period, the article said, citing four people with knowledge of the situation
Original posts are a core element of Facebook because they bring the most engagement. They’re classified differently than posts such as links to websites or content that people share.
The Information said it had viewed “confidential company data” about several types of content sharing that happens on Facebook. It said Facebook has set up a team in London to help develop a strategy to stop the double-digit decline.
Facebook downplayed the issue in a comment to The Information: “People continue to share a ton on Facebook; the overall level of sharing has remained not only strong, but similar to levels in prior years.”
But Facebook stock retreated, falling 2.65% to 110.63 in the stock market today. It’s pulling back from a buy point at 117.09.
Get a better read on Facebook’s stock health and how it stacks up vs. rivals at IBD Stock Checkup
According to an article by Bloomberg, CEO Mark Zuckerberg has spoken at Facebook staff meetings this year about the need to inspire personal sharing. It said Facebook has tried several tactics to encourage more of these posts, such as an “On This Day” feature launched last year that brings up memories from past years that users might want to talk about again.
It’s also why Facebook is heavily promoting its Live streaming feature, which has attracted strong engagements.
The decline in sharing isn’t necessarily a sign of doom for Facebook. User growth has risen steadily year after year, and daily active users numbered 1.04 billion, up 17%. The company also soundly beat fourth-quarter earnings expectations on booming mobile ad revenue.
But in the long term, a decline in personal sharing could be a problem for keeping people highly engaged on the world’s largest social networking website.