Tech

Shira Ovide is a Bloomberg Gadfly columnist covering technology. She previously was a reporter for the Wall Street Journal.

You probably can't find this column on Facebook anymore. 

Millions of businesses, news organizations (like this one) and other commercial entities rely on Facebook to spread their messages and articles. It's an arrangement with huge benefits for both Facebook and the commercial organizations that pitch Diet Coke or circulate Donald Trump interviews on a digital hangout with more users than the population of China. But it's far from an equitable partnership, as developments on Wednesday show. 

For what feels like the 500th time in Facebook's history, the company announced changes to what kinds of information its computers will prioritize in the News Feed. The Grand Poobahs at Facebook now say people want to see more posts from Aunt Martha's trek in China and fewer news articles or oddball Dr. Pepper videos that have been shared by their friends. 

Mark Zuckerberg vs. the World
Facebook continues to suck in more people, even though the social network's user base is larger than the population of China
Source: Facebook
Note: Active users are people who logged into Facebook or used Messenger in the prior 30 days.

If you think the rules of Facebook's News Feed are pointless arcana, open the Facebook app and see how many digital videos you see compared to a year ago. Why? Because Facebook decided people wanted to watch video and tweaked its computer models to make sure video showed up in users' News Feeds. News organizations and marketers responded by making way more videos. Now the whole web is video obsessed. Facebook's rules have changed the trajectory of the internet.

For businesses already uncomfortable about their reliance on Facebook, the latest News Feed changes underscore what a Faustian bargain they've all made.

Facebook is in sole control of its rules, and it can change them without notice. Even big companies like news organizations often don't know Facebook has tweaked what shows up in the News Feed until they see web traffic from Facebook fall. This latest tweak to favor personal messages over commercial ones no doubt will have profound effects on those millions of businesses that set up shop on Facebook. 

Even Facebook acknowledges this, softly. "We anticipate that this update may cause reach and referral traffic to decline for some Pages," the company said in a blog post on Wednesday. (Pages are dedicated Facebook profiles for businesses, brands like Diet Coke and other commercial entities.) 

Facebook makes nearly all of its $20 billion in annual revenue from those commercial organizations, which pay Facebook for the privilege of promoting Ford trucks, Bonobos pants or Donald Trump interviews to its 1.65 billion users. Even 10 years after Facebook launched the News Feed and after 500 controversies over what it prioritizes there, it's not clear Facebook cares about the effect its decisions have on those commercial organizations. Facebook is more powerful than any single business. 

Power Couple
Google and Facebook have a lock on the market for web advertising
Source: eMarketer

Facebook has a simple formula for success: The longer users stay, the more ads Facebook can show them and the more money it makes. Right now, people on average spend 50 minutes a day on Facebook, its Messenger chat app and Instagram, the company says. It wants them to stay even longer. If photos of your aunt's trek in China help keep you Facebook longer, that's what Facebook wants to show you. If articles about Donald Trump keep you on Facebook longer, that's what Facebook wants to show you.  And now, Facebook has opted for your aunt over Donald Trump. In six months, it could decide something else.

It makes sense for Facebook to keep adapting to people's changing digital tastes. But for everyone else dependent on Facebook's whims, this flexibility is a nightmare. Expect to hear much grumbling again this time from news organizations, web publishers, marketing organizations and others about Facebook's News Feed changes. In some respects, those tensions are the inevitable push-pull between powerful distributors like Facebook and those that rely on them. Netflix is constantly tussling with companies that make TV shows and movies. News organizations and web services such as Yelp long have complained Google is unfair about how it ranks web search links. 

In truth, all the griping in the world doesn't dent Facebook's dominance. The marketers, news organizations and local coffee shops still need Facebook, no matter what terms the company makes, and then remakes. That means they'll continue to publish on Facebook, devote teams of people to making videos exclusive to Facebook and lure customers to their Facebook profiles. But they also should never forget all the world is Facebook's, and the company gets to set all the rules. 

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

  1. It's hard not to make a connection between the latest News Feed changes and Facebook's recent effort to reverse a decline in personal posts such as baby photos and updates from last night's Taylor Swift concert. Instead, Facebook users are sharing more news articles or information from other websites. The News Feed changes make me wonder if Facebook is seeing a decline in time spent on the social network as a result of the shift in the type of posts.

To contact the author of this story:
Shira Ovide in New York at sovide@bloomberg.net

To contact the editor responsible for this story:
Daniel Niemi at dniemi1@bloomberg.net