Source: Facebook.

After CEO Mark Zuckerberg hinted at a recent town hall Q&A about the possibility of a "dislike" button, the world got its first glimpse of what that means this month. Facebook (NASDAQ:FB) Reactions, while not exactly a dislike button, offers users a range of emojis to express empathy with posts beyond the generic like button. Reactions is being tested in Ireland and Spain, so you'll probably have to stick to pasting emojis in the comment section if that's your thing. 

Let's look at Facebook's impetus behind expanding the like button.

Not just another form of engagement
The like button currently operates as a catch-all on Facebook. It could mean anything from alerting your friend that you saw her post to saying something like "OMG!!! This is the best thing ever!" On the other hand, there's a lot of content posted on Facebook that many feel it's inappropriate to "like," such as a post about a sad life event.

Initially, Facebook hopes the expanded range of emotions represented in Reactions will help users engage more with content that falls into that latter category. While Facebook tracks how much time its users spend looking at a post, pushing the like button is an indication that that user wants to see more content like that.

In Facebook's early tests of Reactions, any Reaction will send the same indication as a standard like. However, the expanded range of emotions could eventually enable Facebook to understand its users and what they're posting even better than it already does.

Facebook is able to develop fairly in-depth personality profiles based on its users' likes. A study from researchers at Stanford and Cambridge found that Facebook understands a user's personality better than her spouse after she's liked 300 items on Facebook. Adding in more specific emotional reactions to items will likely make that profile even more accurate. That will allow Facebook to target ads more effectively and produce more engaging News Feeds for its users.

Additionally, Reactions provide valuable data to help Facebook's AI algorithms understand the sentiment of the content posted on the social network. Facebook has invested heavily in natural language processing AI, and relies heavily on machine learning to improve those AI algorithms. Reactions turns Facebook's users into AI trainers. Better understanding its content can help Facebook improve the News Feed as well, and it can help Facebook place more appropriate ads next to its content.

What could go wrong?
Reactions isn't a surefire home run. There are a few things that could prevent it from producing the results Facebook is looking for.

Sarcastic Reactions will surely be a thing. People "laughing" at tragedies or "crying" at baby announcements will mess up the signal Facebook is looking for with Reactions. If enough people use the tool appropriately, however, that noise will be easily filtered out.

A bigger problem could be the paradox of choice, in which having too many choices leads to inaction. Users now have seven ways to indicate their reaction to a post instead of just one: like, love, haha, yay, wow, sad, and angry. Given more choices, it's more likely users won't make any choice at all. If that's the case, Facebook is likely better off sticking with the standard like button and killing off Reactions.

Finally, the reaction to Reactions could just be negative. People may not want to use it for whatever reason and Facebook will suffer some poor PR for a couple of weeks -- something it's quite used to.

None of these things is a significant threat to Facebook though. Given the potential upside of adding Reactions to the like button, there's no reason Facebook shouldn't see what comes of testing Reactions in Spain and Ireland. If Facebook expands the test to more countries, it's a good sign that Facebook is seeing good engagement from the tool, and it could lead to more engagement on Facebook and more targeted ads. That means higher ad prices and more ad revenue for investors.