Facebook Inc. (NASDAQ:FB) has been talking about a new revenue generator called “Promoted Posts,” where the social networking site essentially admits that not every post a user makes actually makes it into all their friends’ News Feeds, and the new service would encourage users to pay to “promote” any posts that it deems important enough to ensure that every friend sees the post.
But it seems that what Facebook Inc. (NASDAQ:FB) hasn’t mentioned is that it may actually have reduced the number of “free” posts that make News Feeds in the first place.
There are some anecdotes being reported that Facebook Inc. (NASDAQ:FB) has changed its algorithm which determines items for users’ News Feeds, with suggestions that as few as 15 percent of “friends” or “likers” are getting any single post by a user. A couple of these case studies are mentioned in a recent article based out of Australia, where a couple of business owners are noticing that while their fan bases have been growing on Facebook inc. (NASDAQ:FB), the number of responses they’re getting has dropped steadily over the last few months.
Catherine Cincotta, owner of a hair-accessory business in Melbourne, Australia, said, “I was getting at least 800 to 1000 post views and then July hit and then all of a sudden it started going progressively down so I was starting to see 300, 200 and now it’s at about 90 on average. I find this to be underhanded … all of a sudden the posts are being suppressed and you’re getting bombarded with requests to advertise with them.” She has about 4,000 fans on Facebook Inc. (NASDAQ:FB).
Facebook Inc. (NASDAQ:FB) charges about $7 to promote a status update, then it scales up according to the number of fans or friends you have, up to about $20 to reach 3,000 fans or friends up to $200 to reach 50,000.
One respondent to a Facebook Inc. (NASDAQ:FB) blog post stated, “I have to tell you the vast majority of my friends really hate this, find it very frustrating, and the only thing that keeps them from leaving Facebook is all their friends are here and there is no real option … yet.”
Is this a new opportunity for Google+ or a resurgence of MySpace? If this ultimately affects user experiences, how will this revenue idea finally resonate with investors like billionaire fund manager George Soros of Soros Fund Management? How does this affect you if you’re an investor or considering an investment in Facebook Inc. (NASDAQ:FB)?