Facebook's (NASDAQ: FB ) efforts to branch out are becoming quite ambitious indeed. Not content to be the world's number one social media website, Facebook has been working on acquiring and developing new ways of delivering content to its enormous user base.
Recently, Facebook's management seems to be intent on becoming a news website. A move which would increase competition with sites such as Yahoo! and Twitter (NYSE: TWTR ) . Analysts question whether or not the expansion, the investment, and the time are worth it.
Feeding the news
As if Facebook was not big enough, the company's plans to expand are starting to border on the megalomaniac side of things. In Mark Zuckerberg's words, Facebook should be "the best personalized newspaper in the world." In practice, this means revamping the newsfeed to offer more high-quality content, versus its current function of communication and sharing some slightly obscene 9GAG pictures. Certainly, an ambitious project.
According to AllThingsD's Mike Isaac, the gap between what Facebook wants to do with its website and what its users want is widening. The company's management seems to have its mind set on turning the news feed into a 'useful' experience, which means delivering higher-quality news content than a cat wearing a hat. The question is whether this is what people want from Facebook.
The company has stumbled before on implementing changes. The timeline was initially met with a great of disapproval, some 70% of the polls users stating they would rather not use the new feature. Many users also disagreed with the forced nature of the timeline change, as the switch was ultimately involuntary. However, the website has become so necessary in so many people's lives that it can pretty much change whatever it wants to.
Delivering news content would put Facebook in direct competition with a large number of major news websites including Yahoo! and Twitter, as well as companies such as CNN, ABC, BBC, Reuters and the AP. These are some tough names to beat. Yahoo! is fairly well established as a go-to website for a wide range of services, including email, news, weather, and stock market information.
Yahoo! ran into a spot of trouble this week, as thousands of users complained about outages in their mail account. Marissa Mayer personally apologized to those affected in a Tumblr posting. Forcing users to switch mail accounts could potentially benefit Facebook.
Another major competitor in the news space is Twitter, which has established itself as a source for many people who like their news up to the millisecond. Providing news has been one of the main factors in Twitter's success story. Since its IPO earlier this year, the stock has doubled, now having reached the $58 mark.
With people relying on so many other news sources, you could question the necessity of Facebook branching out to this avenue. In any case, users don't seem thrilled at the prospect.
The bottom line
It looks like Facebook is trying to take over the world. If this is its plan, it has been doing a solid job of it so far. Expanding its range of services, the company now intends to become the world's premiere personalized news website. Some commentators are wondering whether the move will pay off, as it does not seem like Facebook's user base needs another news outlet.
More compelling ideas from the Motley Fool
Opportunities to get wealthy from a single investment don't come around often, but they do exist, and our chief technology officer believes he's found one. In this free report, Jeremy Phillips shares the single company that he believes could transform not only your portfolio, but your entire life. To learn the identity of this stock for free and see why Jeremy is putting more than $100,000 of his own money into it, all you have to do is click here now.