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Facebook News Feed: Is the Facebook News Feed Destined for Failure?

Facebook News Feed: Just when it seems that Facebook Inc (NASDAQ:FB) is doing everything right, something silly comes along and gets in the way. Well, this time it does not appear quite as silly, as a lot of people are angry about the most recent change.

Hedge funds, on the whole, were very bullish on Facebook last quarter. The total size of the funds we track that were invested in the company grew by nearly 40% from Q3; that’s a huge spike (see why it’s always important to pay attention to the smart money).

Facebook Inc. (FB)

According to a recent article published by the USA Today online, it appears that Facebook has decided to offer “users preferential placement of posts on the news feeds of other people for a $7 fee. Or, taking it just a step further, Facebook may be burying the posts of those users, unless and until they pay $7.”

Despite the fact that this latest change is mostly related to commercial users who are looking to take their Facebook Inc (NASDAQ:FB) marketing strategy to the next level, it still makes many wonder what the company is actually trying to accomplish.

The article goes on to add a little bit of background information as well as what the company is facing moving forward:

“Facebook presumably did not purposefully create a free advertising vehicle (that is, the standard posting function) that’s more effective than its paid vehicle (display advertising).”

“But that’s what it’s got. And, based on its efforts so far, there is no way that Facebook can deliver advertising that’s effective for sponsors and yet does not alienate its user base, which is immense but not necessarily loyal to a fault.”

At this point, there is no arguing the fact that every time Facebook Inc (NASDAQ:FB) tries to think differently that they end up thinking crazy.

If you want to take a closer look at some of the statistics related to the FB news feed, check out this official blog post from the company. While you should take the time to read the entire post, here is a snippet to get you started:

“There have been recent claims suggesting that our News Feed algorithm suppresses organic distribution of posts in favor of paid posts in order to increase our revenue. This is not true. We want to clear up any misconceptions by explaining how the News Feed algorithm works.”

What do you think about this latest change? Share your opinion in the comment section below.

Check back here for more updates on Facebook News Feed.

DISCLOSURE: I have no positions in any stock mentioned.

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