Facebook Scenario: Investors Getting Rewarded, While Users Have To Wait

It takes time for a massive ship to turn. Mark Zuckerberg is the captain of the ship and he will take time to turn. Till he takes his time, investors are cashing in money and users are waiting at the shore for ship to turn and arrive.

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Facebook Scenario Investors Getting Rewarded, While Users Have To Wait
Facebook Changes Still Not In Circulated; Users Wait, While Investors Get Rewards

Facebook CEO Mark Zuckerberg announced major changes in newsfeed in the beginning of this year. The new design will be focused on showing more posts from friends and family of users, while business and advertising posts will take backseat. The decision to make changes has been taken with growing criticism over focus of one of the biggest social media companies in the world on generating revenue, rather than user experience and offering quality time. The move was also made to tackle issues such as fake news, hate speech, and Russian meddling during elections. Though the social media firm has not given any deadline about the changes, the move gave rise to reconstruction of marketing strategies for many businesses and publishing houses which rely heavily on the platform to generate traffic and revenue. The decision might be against what investors think ‘right for business’, but it is for the sustained future of the company, outlined CEO. After the announcement, Facebook has not given any update about the changes. Users have been waiting for the next update, while investors have been reaping benefits of the current design.

The California-based social media firm Facebook made changes in its mission last summer. It no longer wanted to connect the world only, it determined to build strong communities. Zuckerberg outlined his belief in binding communities in the way religions did. These ambitions needed redesign of algorithm to weed out negativity from the platform. Determining the need to reform and rise in criticism over getting users addicted, Zuckerberg took a step to redesign the newsfeed that aligns with the new mission. But those changes have not been implemented yet. The work is in progress, but users have been asking for update on how those changes will improve their experience and add quality time in their lives. The past 14 years of the journey have been focused on increasing user base and revenues, but now Facebook decided to ask users how they feel about the platform. sThe response made them change in newsfeed. But the question remains, when?

The current algorithm is focused on promoting posts from paid advertising. The algorithm attracted more advertisers and consequently added more revenue. Though the time spend on the platform in North American region reduced, the company recorded growth in the region. However, it seems that Zuckerberg has a lot of control over the company. Putting pressure on investors will not make him change anything until he decides to. As of December 31, 2017, the securities filling indicated that Zuckerberg has a control over 87.5 percent of Class B shares of the company. These shares hold 10 times more voting power than Class A shares. The largest institutional investors of the firm, Black Rock, Fidelity, and Vanguard have an aggregate percentage of 18.36 percent of Class A shares. However, their voting stake is in small fraction as they do now own any Class B shares.

It takes time for a massive ship to turn. Mark Zuckerberg is the captain of the ship and he will take time to turn. Till he takes his time, investors are cashing in money and users are waiting at the shore for ship to turn and arrive. As the company looks forward to focus on emotional health of people, only time will take if changes are favorable for its long-time growth.

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