For years, Twitter (NYSE: TWTR) has had an advantage over Facebook (NASDAQ: FB) that the latter could never seem to overcome: real-time news. Last year, Facebook started to stand on its own feet news-wise as it mimicked Twitter’s trending topics. While it’s not as user-friendly as Twitter’s feature, it was a necessary step.
But now, Facebook is taking it in a whole new direction, breaking away from the modus operandi both companies have had over the years of copying each other to compete with each other. Facebook announced that beginning Wednesday, select publishers would begin publishing articles directly to Facebook, including the New York Times, BuzzFeed, National Geographic, NBC, The Atlantic, The Guardian, BBC News, and German publishers Spiegel and Bild.
What does this mean?
Because most of these publishers already have a strong audience on Facebook, Instant Articles is a great way to provide a better news experience for that audience. The problem that Facebook is trying to solve is mainly wait time:
“People share a lot of articles on Facebook, particularly on our mobile app. To date, however, these stories take an average of eight seconds to load, by far the slowest single content type on Facebook. Instant Articles makes the reading experience as much as ten times faster than standard mobile web articles.”
The feature also includes several interactive features, such as zooming to explore high-resolution photos, auto-playing videos, interactive maps and liking or commenting on parts of an article in-line.
It’s a win for publishers because they are allowed to sell ads in their articles and have a greater reach beyond their current digital subscribers. It’s a win for readers because it gives them a more seamless experience. And it’s a win for Facebook because of revenue sharing and driving more mature traffic.
Another egg in the basket
This is just one of the many things Facebook is doing this year to protect its castle from losing users to rival social media networks. Last year, its stock price wavered after the company announced its expenses would spike 55 to 75 percent in 2015—and it’s been up and down ever since.
For some investors, it’s been a sign that the company is desperate. But for others, it’s simply that Facebook is kicking it into high gear. It’s ironic, really. For a long time, Wall Street has been worried that Facebook wouldn’t be able to protect its core site and now that it’s investing to do just that, investors aren’t so sure.
It didn’t help that Facebook missed on revenue expectations with its most recent earnings release, posting $3.54 billion on the top line, $20 million short of the consensus. However, the miss is largely due to the strong dollar and it’s still a 41.6% increase from the previous year, so the company’s strength shouldn’t be in question.
Facebook is on the road to maintaining its role as the leader in its industry for years to come. While naysayers may point to teenagers leaving the social media network for a more simplified experience — or to get away from their parents — it still managed to grow its monthly active users (MAUs) by 4% from the previous quarter and 13% year-over-year to 1.44 billion users. And with mobile MAUs making up a large portion of that (1.25 billion users), Facebook is succeeding in expanding the mobile user experience to not only pave the way to attract new users, but also to convince users who have left to come back.
Other investors may be worried about the tech bubble. And while Facebook may be vulnerable to the bubble bursting, it’s certainly not part of the problem. The company is repeatedly in the black and is proving with each new product launch that it has a sustainable business model. Facebook is here to stay and it’s worth the investment.