Mark Zuckerberg loses over $3 billion after Facebook newsfeed change
It was recently revealed that Facebook is planning to make a major change to way their newsfeed operates, with many not too happy about the result. The company's plan is to tweak what users see on the social media platform to make it more "meaningful". Essentially, this means that we will see more posts from the people we know and less from news organizations, celebrities and brands we follow.
The company went public with the change on Thursday this week, with CEO Mark Zuckerberg detailing his reasoning for changing the algorithm in a Facebook post that day. Explaining that he wanted to prioritise posts from friends and family over businesses, he said:
“We built Facebook to help people stay connected and bring us closer together with the people that matter to us. But recently we've gotten feedback that public content – posts from businesses, brands and media – is crowding out the personal moments that lead us to connect more with each other.”
“Based on this, 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.”
The CEO claimed this is about allowing people to see the posts they really care about, but other analyists have claimed there could be a more nefarious purpose behind this change - and it may have cost Zuckerberg a lot of money already.
Some have suggested that this is more about the company's desire to counteract 'context collapse', wherein users are sharing less and less information about themselves on Facebook, opting to use other social media platforms for this. This personal data is vital to Facebook, who use our information to better target us for advertisements, from which they make the bulk of their money.
The 33-year-old started Facebook in 2004 at the age of 19, and owns a 17 percent stake in the company, which went public in 2012. But this recent change has definitely affected the market and his own money, as his personal net worth has reportedly dropped by over 4 percent, a cost of $3.3 billion.
The website's share value dropped before the US markets opened on Friday, and by close of business on Friday the company's shares were trading at $179.37, a drop of more than 4.4 percent on Thursday's price of $187.77. Forbes has now calculated that for Zuckerberg, the co-founder, chairman, chief executive and public face of the company, this translated into a hit to his personal fortune.
Mark Mahaney, an analyst at RBC, said that he believes Facebook's changes would work out better for the company in the long term. "Making the feed more relevant should boost user and engagement growth over time," he told Bloomberg. "We believe these changes will be beneficial to Facebook in the medium and long term.”
This short term drop in his wealth might not be too worrying, seeing as the company's value is still rising an average of 40 percent each year. Zuckerberg himself, despite the dip in his net worth, is still worth $72.4 billion.