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Facebook Inc (FB) Can Afford to Redecorate

Facebook Inc (NASDAQ:FB) is changing again.

The social networking giant is hosting a media event tomorrow at its headquarters. There isn’t any need to guess what this will be about. The invitation clearly explains that tech journalists are being invited to “come see a new look for News Feed” at Facebook.

Facebook Inc. (FB)

Facebook Inc (NASDAQ:FB) is never shy about mixing things up. There’s an outcry from users when things change. They adapt. Facebook Inc (NASDAQ:FB) winds up making more money and attracting more net new users, validating the tweaks.

Rinse. Repeat.

However, Facebook Inc (NASDAQ:FB) doesn’t peel back the curtain for media types unless it’s significant. Graph Search and Facebook Gifts are some of the more recent event-backed initiatives.

Some are speculating that this will be a more photo-centric facelift, and that makes sense given the popularity of Flipboard and Facebook’s acquisition last year of Instagram. However, investors will want to know how Facebook plans to monetize the new initiatives.

Facebook’s been pretty good about milking more money off of its free site with more than a billion active users. Revenue climbed 40% in its latest quarter, even though monthly active users have only grown by 25% over the past year.

Facebook Inc (NASDAQ:FB) doesn’t need to take chances, but it can afford to do exactly that. Where will people go? Google Inc (NASDAQ:GOOG) is pushing Google Plus as a Facebook alternative, but it has yet to sway most Facebook users. LinkedIn Corp (NYSE:LNKD) just celebrated passing the 200 million member milestone, but that only means that the career-oriented social networking site has just a fifth as many users as Facebook.

There may very well come a time when Facebook Inc (NASDAQ:FB) does go too far, with Google and LinkedIn there to make the most of the opportunity. However, the likely news tomorrow will be modest changes that will enhance both user experience and the monetization potential of the newsfeed.

Facebook has come too far to get too greedy.

The article Facebook Can Afford to Redecorate originally appeared on and is written by Rick Aristotle Munarriz.

Longtime Fool contributor Rick Aristotle Munarriz has no position in any stocks mentioned. The Motley Fool recommends Facebook, Google, and LinkedIn. The Motley Fool owns shares of Facebook, Google, and LinkedIn.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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