Facebook: A digital glutton?

The “Facebook effect” provides the prove that destroying the old to make way for the new is the essence of market economies.

 What is the most popular mass media of the 21^st century? Ask most young people this question and they are likely to say it is Facebook. They are unlikely to mention or pick familiar news media such as CNN, New York Times or Fox News. And, to some extent, they are correct: Facebook, though a mere social networking platform, has become a form of digital glutton that is ingesting everything, including personal data, news, communication, and public opinion, among others. It has even become a mobilization tool used by social movement activists: In 2011, nearly 9 out of 10 Egyptians and Tunisians who participated actively in the Arab Spring used Facebook to organize protests or spread awareness that led to the fall of some autocratic governments in the Middle East.¹

Yet for Facebook, the opportunities for expansion are boundless. Last month, it entered a lucrative partnership with nine news firms, including the National Geographic, New York Times, and the Guardian to develop Instant Articles – a   type of news service.² With this new partnership, Facebook will host the articles from these news media rather than just providing web links that send readers off to the news firms’ websites. This ensures that Facebook users can read stories from the affected publishers without leaving the social network. This arrangement obviously gives publishers new monetization opportunities: they will be able to sell advertising that normally appears next to their stories. Facebook allows them to either keep all the revenues or, alternatively, the publishers can authorize it to sell ad space and then give them a 30 percent cut.³

To those that have shall be given

This new partnership is obviously a strategic success for Facebook and it definitely highlights its growing clout in the news business. Many newspapers and magazines now get a significant number of their readers from Facebook. In addition, a newspaper or magazine can dramatically increase its website traffic if it has a Facebook page. For instance, the New York Times, which has Facebook page, gets as much as 15 percent of its traffic from Facebook.⁴ And some news sites like Buzzfeed gets as much as 37 percent of their traffic from social networking sites like Facebook and Twitter.⁵ The Facebook’s instant articles news service is obviously a success story for the affected news sites, most of whom have already cultivated legions of Facebook fans. Through the partnership, Facebook can keep users from straying as well as serve up more ads, while news firms can reach new audiences.

Just like in every partnership, this alliance is not without its problems. As the “Goliath” of the social networking industry, Facebook has more than 1.3 billion users, a value that is worth about 9 percent of all online advertising globally. Hence this new partnership may give Facebook more power because its users may begin to think that they can get everything they need in one stop. If this happens, the websites of the affected newspapers will become undermined as readers’ destination. In the past, firms like Zynga have been bruised after they hitched their business to Facebook.⁶

This challenge of giving social networking sites like Facebook too much power has prompted some news firms to take more analytical approach to their online business arrangements. Many of the news firms now try to figure out where their readers come from and they often hire teams of data crunchers and traffic analysis firms like ChartBeat to do the job for them. This approach, however, carries some risks too: these news firms seldom pay enough attention to the time people spend engaging on their websites; instead they spend too much time focusing on the number of visitors driven through social media.⁷

It is worth bearing in mind that there is a high possibility that more firms will soon follow in Facebook’s wake. As a matter of fact, many social networking sites now compete to host premium contents from news firms like CNN, BBC News, ABC News and Yahoo News. A good example is the Snapchat, a messaging service. Since the beginning of this year it started offering articles from a select group of news firms to its users – a strategy that can attract more visitors to its website. The bottom line here is that, eventually, competition will force most social networking sites, including Facebook, to pay publishers to host contents.⁸ When this happens, news firms will become less vulnerable to the whims of the algorithms being used by any social networking site. But, until then, news firms and publishers continue to live with the challenges posed by social networks that are almost the modern day newspapers.

For the news firms, the message is clear: Since they can curate content, engage users and sell their attention to advertisers, social networking sites like Facebook can cool readers’ enthusiasm for the traditional news media.

References

¹Huang C. (2011): Facebook and Twitter Key to Arab Spring Uprisings: Report. The National. Retrieved June 2, 2015 fromhttp://www.thenational.ae/news/uae-news/facebook-and-twitter-key-to-arab-spring-uprisings-report

²Johnson C. (2015): What Facebook’s News Service Means for Mainstream News Outlets. Deserete News National. Retrieved June 2, 2015 from http://national.deseretnews.com/article/4466/what-facebooks-news-service-means-for-mainstream-news-outlets.html

³News Companies and Facebook (2015, May 16). The Economist. Retrieved June 2, 2015 from http://www.economist.com/news/business/21651264-facebook-and-several-news-firms-have-entered-uneasy-partnership-friends-benefits

 

 

⁴Ibid

 

⁵Lafrance A. (2012): Coming in the Side Door: The Value of Homepages is Shifting From Traffic Driver to Brand. NiemanLab. Retrieved June 2, 2015 from http://www.niemanlab.org/2012/08/coming-in-the-side-door-the-value-of-homepages-is-shifting-from-traffic-driver-to-brand/

 

⁶News Companies and Facebook, op. cit., p.58

 

⁷Ibid

 

⁸Ibid