Closing night, Facebook CEO Mark Zuckerberg proclaimed via a Facebook post that Facebook is altering how News Feed works. In summary: more posts from friends and family, limited reach for publishers and brands.
Now, it seems that announcement might have cost Zuckerberg approximately $3 billion, personally- as a result of the impact it had on Facebook’s share price Friday.
It dropped 4.47%, to $179.37- trading won’t resume until next Tuesday due to the holiday.
Media companies are understandably concerned about how Facebook’s sudden shift will affect their business. Advertisers are really bothered about whether a marketing platform they’ve come to rely on is suddenly moving to become much more costly.
Because while we sort of think we get the gist of what this might mean for publishers, there’s a ton of uncertainty.
And of course, many media companies aren’t extraordinarily in a financial position to weather a massive amount of uncertainty.
Yes, I know that the media doesn’t get a lot of sympathies these days.
-Mark Zuckerberg said.
But it’s worth keeping in mind that even the bigger companies that drive engagement on Facebook, and that employ thousands if not millions of people, are tiny compared to Facebook.
They’re tiny compared even to Zuckerberg himself, at this point. Earlier this year, for example, we reported that Google and Facebook make more money from exhibit than every newspaper, magazine, and radio station on the planet combined.
Buzzfeed, the majesty of the Facebook column, brought in an estimated $280 million in revenue last year.
Let’s let a dollar sign represent $100 million, so Buzzfeed’s annual revenue looks something like this:
$$$.
The New York Times was on track to make $579 million last year — again, the entire company. Again, a dollar sign represents $100 million:
$$$$$$.
Now compare these to the estimated amount Zuckerberg lost Friday, just one day. Roughly:
$$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$.
And while we’re at it, compare it to what he has left:
$$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$.
This is not to resent the success of Facebook or Zuckerberg personally. As for the News Feed, it is still a sceptic but change is often a good thing. A year from now we might all wind up grateful. Maybe. Again, there’s a ton of uncertainty here.
Still, at this size, the smallest move Zuckerberg or Facebook makes results in immense ripples throughout the digital economy.
So while Facebook works on improving the News Feed, thinking before acting would be a wiser move for sure.
