Please ensure Javascript is enabled for purposes of website accessibility

Signs That Facebook Is Becoming a Bigger Player in News

By John-Erik Koslosky – Feb 20, 2016 at 5:42PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

As publishers sign on to Facebook's Instant Articles platform, the social network is showing signs of its emergence as a bigger source of delivering hard news.

Facebook's (META -0.54%) efforts to turn your news feeds into more of what the name suggests -- a source of news -- seem to be gaining traction.

A recent report from NewsWhip shows that cat videos are no longer so dominant in the world of Facebook shares and engagement. Hard news from traditional sources such as The New York Times and The Washington Post are now gaining ground, according to this look at what's popular on Facebook.

And that would appear to be backed up by the findings of a Pew Research Center study last year that showed both Facebook and Twitter continuing to play more important roles in the distribution of news cross the Web. The Pew findings showed that the share of Americans who turn to Facebook for news had risen by some 16 percentage points in just two years, from 2013 to 2015, and stood at 63%. Twitter, meanwhile, had seen also seen a significant -- although more modest -- increase, from 52% to 63%.

Becoming an important news source for its users helps to further solidify Facebook's position as a utility of daily life. The more pervasive Facebook can become in our daily function, the deeper its roots grow into our habits over time.

That's allowed the business to continue growing its average revenue per user despite shifting preferences from desktop to the generally less-lucrative mobile platforms. For the fourth quarter of 2015, worldwide ARPU came in at $3.73, up 28% from the year-ago quarter.

Publishers seeing results
Half of all of the Post's social traffic in October came from Facebook, and that was up significantly since just May, Contently's Kieran Dahl, wrote in an article on Jan. 25. "And if more readers keep looking for their news on Facebook, don't be surprised if other serious publishers continue to see big jumps in engagement throughout 2016," Dahl wrote.

The Huffington Post and BuzzFeed, long-dominant players in viral content, still top the charts for shared articles on Facebook. But venerable, old-school news sources such as The Washington Post and The New York Times continue to climb the list -- and do so while maintaining a focus on hard-hitting news, not listicles and cute-cat videos. Buzzfeed is also making a name for itself as a source of news.

"Issues such as the environment and gun control featured strongly in conversation on Facebook in December," the News Whip report noted. Of the top 10 English-language sites on Facebook, according to News Whip, the majority focus on hard-hitting and/or political news. Fox News pulled into fourth place, followed by The New York Times, The Guardian, Breitbart, BBC, The Washington Post, and The Daily Mail.

Ongoing efforts in news
Facebook hopes that its Instant Articles platform -- which encourages news outlets to publish directly to Facebook in exchange for faster load times and increased reach and advertising revenue -- will continue to grow and attract publishers. The Times and the Post have been early adopters. And the Post has fully bought in to the platform, now sharing as many as 1,200 articles directly to Facebook each day.

For Facebook, the benefits to a growing Instant Articles platform are significant. It can serve its users more content they want to see in their news feeds every time they open their app or check the site. And it can keep them inside its walled garden. Users reading Instant Articles are not being steered off the platform to other websites.

It's not a no-brainer for news outlets -- at least not yet
News publishers will have to decide if the platform works for them, and there are two important -- and potentially conflicting -- considerations for those outlets.

The first pertains to revenue. Is Facebook able to provide a desirable level of ad revenue through Instant Articles? After a tepid-at-best response to the news publishing platform last year, recent tweaks have sought to address this concern, which was one of the primary complaints from publishers.

The second question is whether publishing directly to Facebook devalues brands that readers have come to count on for quality, in-depth news coverage of important issues. That may be a tougher one to answer, at least in the short term.

Company sees important progress
COO Sheryl Sandberg touched briefly on Instant Articles in Facebook's Jan. 27 earnings calls, noting that the company had hoped to improve the user experience by getting publishers to upload directly, and so far, it has been "seeing great engagement from that."  Sandberg also noted that more news publishers appear interested in premium content, which allows them to pay for broader distribution of their articles.

Those are signs that Facebook is continuing to gain traction as an online distributor of news stories, something that could make the platform even stickier for many of its already loyal users. That's more good news for a company that's been demonstrating it can monetize those users increasingly well.

John-Erik Koslosky owns shares of Facebook. The Motley Fool owns shares of and recommends Facebook. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Meta Platforms, Inc. Stock Quote
Meta Platforms, Inc.
$135.68 (-0.54%) $0.73

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/03/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.