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NEW YORK (
Facebook(FB - Get Report) announced several new features to its News Feed earlier Thursday, as the social networking giant tries to remove the clutter, and potentially generate even more revenue from ads.
CEO Mark Zuckerberg started off the presentation saying Facebook is "trying to give everyone the best personalized newspaper." New tabs include All Friends, Music, Photos, Following, Revamping Most Recent Feed and Games. These changes are designed to make the feed experience more engaging, and again, to declutter. The company is also trying to do away with people checking it once a week or once a month. It wants Facebookers to stay active on the site, a criticism it has faced in the past and acknowledged earlier this year.
Facebook is also upping the ante as it relates to being more visually appealing. Its News Feed was approximately 50% photos and videos. With changes rolling out Thursday, the new feed will focus on three things: stories, a choice of other feeds, and mobile and desktop consistency, which could lead to higher advertising rates, says
Hudson Square Research analyst Dan Ernst.
"Facebook is trying to have better ad formats, but it didn't show that during the presentation," Ernst said, in a phone interview. The new format is perfect for showing rich, sponsored stories." Ernst rates Facebook shares "hold."
As Facebook increasingly becomes a
mobile company, the concerns that advertising will not resonate as well on a mobile experience are prevalent.
Google(GOOG - Get Report) has dealt with this, as has Facebook.
Recent trends have shown that advertising on mobile may be getting better. Last quarter, Google showed cost-per-click, a key metric for ads, fell 6% year over year. Yet they
rose 2% sequentially. For Facebook, mobile revenue represented 23% of its $1.585 billion in advertising sales in the fourth quarter, up from 14% in the third quarter.
By making the News Feed look the same on all experiences (something Facebook stressed during the presentation), Ernst noted advertisers could run the same campaign on both desktop and mobile, allowing Facebook to have the same cost per impression, or CPM, for both desktop and mobile.
Facebook announced that the new News Feed would start Thursday, with a limited roll-out on desktop. It would be coming to phones and tablets "over the next few weeks," but nothing specific was mentioned.
Shares of Facebook were higher in Thursday trading, up 3.96% to $28.54.
Written by Chris Ciaccia in New York