Mark Zuckerberg’s decision to prioritize posts from family and friends over brand-driven content on Facebook’s News Feed has cost him a small fortune, it was reported on Saturday.
The CEO of the world’s largest social media network lost $3.3billion off his net worth on Friday, Bloomberg News reported.
Facebook shares fell 4.5 percent on Friday after the closing bell on Wall Street.
Zuckerberg, who began the day worth $77.8billion, is now worth $74billion, according to Bloomberg.
That means Spanish retail billionaire Amancio Ortega has now leapfrogged Zuckerberg to take fourth place on the list of the world’s richest people.
Both Zuckerberg and Ortega have a ways to go to catch the world’s wealthiest human, Amazon CEO Jeff Bezos.
Mark Zuckerberg’s decision to prioritize posts from family and friends over brand-driven content on Facebook’s News Feed has cost him a small fortune
Shares of Facebook Inc fell more than 4 per cent on Friday after Zuckerberg announced changes to the platform’s centerpiece News Feed that he said would hit user engagement in the near term
The graph above shows the sharp decline of the price of Facebook stock on Friday
After the stock market closed on Friday, Bezos’ net worth reached $109billion, the most ever, according to Forbes.
Since the start of the new year, Bezos has pocketed $10billion in profit. That’s $1billion per day for Bezos, whose wealth is built on ownership of stock in Amazon.
Zuckerberg said on Thursday the company would change the filter for the News Feed to prioritize what friends and family share, while reducing the amount of non-advertising content from publishers and brands.
Pivotal Research Group said its analysis of Nielsen’s digital consumption rates showed that usage was already falling prior to Zuckerberg’s announcement, although from very high levels.
THE WORLD’S RICHEST PEOPLE:
Gains in 2018: $10.11billion
The CEO and founder of Amazon.com is listed as the world’s richest person with a net worth of $105billion.
Thanks to a surge in Amazon’s share price, the 53-year-old added $34.2 billion to his wealth in 2017 to round out a standout year for the tech and retail giant.
The Seattle-based company has grown from its online retail roots to cloud computing, streaming video, artificial intelligence and more.
Amazon’s shares have recently been boosted by its acquisition of grocery chain Whole Foods. The firm has also expanded its line-up of devices tapping into its digital assistant Alexa.
Gains in 2018: $190million
The 61-year-old Microsoft founder had held the top spot on Bloomberg’s rich list for four years until being overtaken by Bezos.
He remains a board member of Microsoft, the software firm he founded with Paul Allen in 1975.
With his wife Melinda, he chairs the Bill & Melinda Gates Foundation, the world’s largest private charitable foundation.
Most of his wealth now comes from other sources outside of Microsoft, with the mogul only owning a 2.5 per cent stake of the world’s biggest software company – worth around $11 billion.
Instead, Gates makes most of his money through his personal investment company Cascade Investment LLC, which he funds entirely himself. The company owns stakes in Canadian National Railway, Berkshire Hathaway, Deere & Co, Liberty Global, Waste Management, green energy technology firm Ecolab, and more.
Gains in 2018: $4.84billion
Buffett is the chairman and CEO of Berkshire Hathaway. The 87-year-old billionaire has been the chairman and largest shareholder of the company since 1970.
He has transformed Berkshire since 1965 from a failing textile company into a conglomerate with more than 90 businesses in such sectors as insurance, railroads, energy and retail, and well over $100billion of stocks.
Gains in 2018: $600million
The Spanish business tycoon is the founder and former chairman of Inditex fashion group. The group is best known for its popular Zara fashion stores.
His group is also the parent company of brands Pull & Bear and Massimo Dutti.
There is more than 2,200 Zara stores in 93 countries with the chain valued at roughly $11.3 billion.
Gains in 2018: $1.2billion
Facebook founder Mark Zuckerberg added a whopping $22.6 billion to his fortune in 2017, bringing his net worth to $72.6 billion.
Zuckerberg began working on the social networking site in January 2004 when he was studying at Harvard. He famously dropped out of the Ivy League school to focus on creating the website.
He took Facebook public in May 2012 and owns about 17 percent of stock.
Zuckerberg and wife Priscilla Chan have publicly pledged to give away 99 percent of their stock over their lifetime.
Gains in 2018: $-522million
Bernard Arnault is France’s richest billionaire and the head of luxury goods group LVMH.
LVMH Moet Hennessy Louis Vuitton is the world’s largest maker of luxury goods.
According to Bloomberg, he controls about half of LVMH, which had revenue of $41.6 billion in 2016, and sells products including Louis Vuitton leather goods, TAG Heuer watches and Dom Perignon champagne.
A warning by Zuckerberg that people could spend less time on Facebook in the short term as a result of the changes sent the company’s stock $8.40 lower to $179.37.
‘We can speculate that the concerns reflected in Zuckerberg’s post may very well have been driving these declines,’ Pivotal’s Brian Wieser wrote in a note.
The company has been criticized for algorithms that may have prioritized misleading news and misinformation in people’s feeds, influencing the 2016 American presidential election as well as political discourse in many countries.
The company’s Chief Executive Mark Zuckerberg announced the changes in a sweeping Facebook post
The company has for years prioritized material that its complex computer algorithms think people will engage with through comments, ‘likes’ or other ways of showing interest
While Facebook’s advertising would be unaffected by the changes, the shift was likely to mean that the time people spend on Facebook and some measures of engagement would go down in the short term, Facebook said.
It may also have an impact on major suppliers of news and other content.
John Ridding, the chief executive of the Financial Times, warned on Friday that the domination of online advertising revenue by search and social media platforms was putting pressure on media firms.
‘The FT welcomes moves to recognize and support trusted and reliable news and analysis. But a sustainable solution to the challenges of the new information ecosystem requires further measures,’ he said.
‘In particular, a viable subscription model on platforms that enables publishers to build a direct relationship with readers and to manage the terms of access to their content.’
Posts from businesses, brands and media will be made less prominent in an effort to help users have ‘more meaningful social interactions.’
HOW FACEBOOK WILL PRIORITIZE FRIENDS IN YOUR NEWS FEED
Up until now, Facebook has prioritized material that its algorithms think people will engage with through comments, ‘likes’ or other ways of showing interest.
But 33-year-old founder Mark Zuckerberg says he wants to change the focus to help users have ‘more meaningful social interactions.’
The move follows his resolution in 2018 to ‘fix’ the site.
It is also in response to criticism that Facebook and its social media competitors reinforce users’ views on social and political issues.
Critics also say sites like Facebook lead to addictive viewing habits.
Zuckerberg cited research that suggests reading ‘passively’ on social media was damaging for people’s mental health, while interacting proactively with friends was positive.
According to Adam Mosseri, Facebook’s New Feed boss, in practice the change mean
- Posts from friends and family will get more prominence that video, news, and other content from formal Facebook pages, such as companies and celebrities
- The number of comments on a post will count more than the number of Likes
- Posts where people have spend the time to write lengthy comments will be prioritized over those with only short comments
- While, news and video will still appear in News Feed, the number of friends sharing it will matter more than its overall popularity
The shift could mean that the time people spend on Facebook and some measures of engagement would go down in the short term.
However, Zuckerberg said it would be better for users and for the business over the long term.
Zuckerberg announced the changes in a sweeping Facebook post on Thursday, saying it was the first in a series of changes in the design of the world’s largest social network.
Facebook has already started changing the way it filters posts and videos on its centerpiece News Feed to prioritize content from friends and family of the user.
For example, a family video clip posted by a spouse will be deemed more worthy of attention than a snippet from a star or favorite restaurant.
But experts claim this is just another money-making scheme for the site, pushing companies to buy more adverts to get user attention.
‘As we roll this out, you’ll see less public content like posts from businesses, brands, and media,’ Zuckerberg said in a post at his Facebook page.
‘And the public content you see more will be held to the same standard – it should encourage meaningful interactions between people.’
The company has for years prioritized material that its complex computer algorithms think people will engage with through comments, ‘likes’ or other ways of showing interest.
Zuckerberg said that would no longer be the goal.
‘I’m changing the goal I give our product teams from focusing on helping you find relevant content to helping you have more meaningful social interactions,’ Zuckerberg said.
The shift was likely to mean that the time people spend on Facebook and some measures of engagement would go down in the short term.
However, Zuckerberg said it would be better for users and for the business over the long term.
Facebook and its social media competitors have been inundated by criticism that their products reinforce users’ views on social and political issues and lead to addictive viewing habits, raising questions about possible regulation and the businesses’ long-term viability.
WHAT THE EXPERTS THINK OF FACEBOOK’S CHANGES TO MAKE YOUR NEWSFEED MORE SOCIAL
Facebook is making major changes to its News Feed so that users can see more content that family and friends share instead of a high amount of content from pages or celebrities.
Here are what the experts think:
It’s about Facebook making more money from ads
‘It’s laughable that they’re pretending this is about their users’ ‘well-being’. It’s not – it’s about them making more money from ads’, Lilach Bullock, a London-based content marketing and social media specialist told MailOnline.
‘It feels like every year, businesses, publishers, and other Pages need to open up their wallet if they want anyone to see their updates’, she said.
‘Now, users need to be ‘protected’ from seeing content that Facebook deems unworthy of them.’
She believes people can decide for themselves what they want to follow instead of having Facebook decide what protects their ‘well-being’.
Ms Bullock also warns the changes will affect small companies the most.
‘Big companies with big followings on Facebook might be affected, but they’ll have the funds to get results in other ways.
‘Small businesses, on the other hand, and social causes will massively struggle.’
People will not spend less time on Facebook
Mark Zuckerberg said that as a result of the changes he believed people would spend less time on Facebook.
However, Tristan Harris, who spent three years as a Google Design Ethicist said it is unlikely Facebook will become any less addictive.
‘Their business depends on them monetizing people’s attention,’ he told Wired.
‘They’d have to fundamentally reexamine their business model to stop doing that.’
It lacks transparency. We don’t yet know what conversations will be prioritized
Other experts have agreed it will cause ‘significant change’ but Facebook has not been clear about what type of discussions it will prioritise.
It may be that controversial conversations are prioritized or group pages where people engage on specific topics, Laura Hazard Owen at Harvard University’s Nieman Journalism Lab told BBC.
‘It’s going to affect publishers a lot, we’re going to be seeing a lot less news organically pop up in our news feeds’, Ms Owen said.
There should be a public debate on the issue
Earlier this week investors said the habit-forming nature of gadgets and social media are one reason why companies like Apple, Google parent Alphabet and Facebook Inc added $630 billion (£463 billion) to their market value in 2017.
One expert believes the announcement is a ‘clear admission’ from the company that their site has an important effect on the health of society.
‘There should be public debate about the values they’re applying to that algorithm,’ said Gabriel Kahn from the University of Southern California Annenberg School for Communication and Journalism.