Businesses, brands, and media companies are preparing for a Facebook apocalypse after an update yesterday in which CEO Mark Zuckerberg said he was refocusing the site’s powerful news feed algorithm so that it prioritizes posts from friends and family. For companies that rely on Facebook as a promotional vehicle, the terrifying takeaway here is that they can expect to see significantly reduced reach in an environment that has already been delivering diminishing returns.
In announcing the change, Zuckerberg even made a startling admission: “[B]y making these changes, I expect the time people spend on Facebook and some measures of engagement will go down,” he said.
It’s not the only thing that’s going down. Shares of Facebook dipped almost 5% after the news sunk in, opening at $178.08 this morning compared to $187.77 at the close of the previous day. Interestingly, Zuckerberg has been talking about these tweaks for a while now and the market has largely shrugged them off. The stock even hit an all-time high of $188 earlier this week. If history is any guide, today’s dip is likely to be another temporary crater.