Zuckerberg announces major overhaul of facebook format
FACEBOOK chief executive Mark Zuckerberg is betting the company’s future on video and disappearing posts called “stories”, not the company’s famous news feed.
Investors are buying into the vision for now.
The newer products may make less money and steal user attention from the main stream of photos, comments and lucrative ads on the social network, Zuckerberg warned.
Marketers are not totally comfortable with the new formats yet, and 2019 will be another year of significant investment, he added on a conference call with analysts.
Zuckerberg said the opportunity would still be bigger than the news feed over time.
Chief financial officer David Wehner also calmed concern about costs next year and quarterly earnings from the company suggested its business is holding up in the wake of scandals and privacy breaches.
Facebook shares rose 3.9 percent in pre-market trading, after closing at $146.22 (R2 167) in New York. Earlier this year, the company said revenue growth rates would decline in the third and fourth quarters, sending shares plummeting.
The company’s flagship social network has almost reached saturation point in terms of its growth, especially in the US and Europe. And new Facebook users often live in less lucrative advertising markets. That has left company spending heavily on more experimental projects.
Future revenue growth depends on Facebook’s ability to shift marketers’ interest to new ads in messaging services, and marketing spots embedded in a popular way of sharing called “stories”, especially on Instagram. In those formats, users post videos about their day that disappear within 24 hours. Users tap through them and see ads in between.
“I want to be upfront that even assuming that we get to where we want to go it will take some time and our revenue growth may be slower during that period,” Zuckerberg said.
Facebook Watch and Instagram TV, the company’s two video services, are way behind Google’s YouTube in terms of size, Zuckerberg said. |