Pretty soon every publisher will be able to create Instant Articles for Facebook (NASDAQ:FB). Instant Articles are specially formatted Web pages containing a publisher's article and hosted on Facebook's servers, which helps them load extremely quickly.
In order to reach more small publishers, Facebook is teaming up with WordPress to support a plugin for users that use the open-source content management system. WordPress powers about one in every four websites on the World Wide Web, and is used by both large and small publishers. Working with WordPress opens the door for a lot of smaller publishers without the technical support to otherwise publish an Instant Articles feed to get started with the new format from Facebook.
Encroaching on Google's space
Google, the Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL) subsidiary, generates a lot of revenue from small publishers. Instant articles poses a direct threat to that business, since Facebook provides advertising on Instant Articles. Facebook also recently announced the expansion of its ad network to the mobile web, which it could promote to publishers creating Instant Article feeds.
Google generated $15 billion in gross revenue last year from websites and apps using its advertising products. While Google pays out 68% to 70% of revenue from those advertisements back to the publishers, that's still an additional $4.7 billion in net revenue for the company. Facebook offers a similar revenue split on Instant Articles advertisements.
It's not clear how the WordPress plugin will impact publishers currently using products like Google's AdSense, but it's likely that Facebook will remove AdSense ads and offer to replace them with its own ad product. Considering Instant Article viewers are necessarily Facebook users, Facebook ads may provide a better return than Google's mobile ads anyway.
Early adopters of Instant Articles initially reported that Facebook's advertising rules were too stringent to allow them to generate revenue similar to their mobile websites. Facebook changed its rules, allowing for more advertisements per article, and publishers report revenue is now on par with their mobile websites. Small publishers, with considerably less advanced ad technology, may actually see an improvement thanks to Facebook.
WordPress is platform agnostic
To be sure, WordPress isn't taking any sides. Its goal is to attract users, and that means serving their needs whether they be Instant Articles or something else. To that end, WordPress also supports a plugin for Google's Accelerated Mobile Pages, or AMP, format.
AMP is seen by many as a response to Instant Articles. The format allows for similar web page caching and requires special code to make articles load faster. AMP pages aren't limited to Google's platforms like Instant Articles are limited to Facebook. Nor are they limited to Google ad products. AMP is open-source, which means other companies can develop their own ad solutions for the format.
The openness of AMP may make it more appealing to publishers, but it also makes it inherently more complicated for publishers to get started with. Smaller publishers may sacrifice flexibility for simplicity. Not that they necessarily have to choose; publishers can create pages in both formats and Google and Facebook will each determine which page to show their users after users have set up their feeds.
Google's current position as one of the biggest monetization solutions for small publishers gives it a lot to lose. While it might have gotten ahead of Instant Articles with AMP and a WordPress plugin, it's still early in the game, and Facebook is about to catch up. With the potential for increased engagement on Instant Articles compared to standard mobile pages, the WordPress partnership could prove very fruitful for Facebook and potentially harmful for Google.
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Adam Levy has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), and 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.
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