Here’s How Facebook’s New News Feed Should Affect Stakeholders

The following is an excerpt from a report compiled by Michael Pachter of Wedbush Securities.

On Thursday, Facebook (NASDAQ:FB) unveiled “A New Look for News Feed” during a presentation at its headquarters. The updated News Feed will provide users with a “personalized newspaper” that allows them to more easily focus on items of interest and importance. The three central tenets of the changes are: (1) richer stories, (2) choice of feeds, and (3) mobile consistency. We expect the changes to benefit users, advertisers, and Facebook, as a better user experience should lead to greater user engagement, resulting in increased demand from advertisers and games companies, and allowing Facebook to command higher prices from its partners.

Richer Stories

Although News Feed has become centered in large part around photos, with photos representing nearly 50% of content, the appearance and relevancy of these photos has been somewhat underwhelming. As a result, the updated News Feed will feature larger images, more prominent titles, better summaries, and logos of the publisher, if applicable. There will also be Pinterest integration, with information about “pinned” items. Timeline will also get a more prominent role through its integration into stories about people, pages, brands, and businesses. Places will now include a map and description, providing the user with greater insight into where a place is located and why it may be worth visiting. Items shared will also get a more prominent display, with users able to hover over a given item to see what others have said about it previously. The user will also gain greater insight into articles and events, among other items.

Choice of Feeds

Users will be provided with greater choice and control over stories in the home page. This choice feature was compared to a newspaper in that the user can easily flip through different sections (Feeds) to focus on items of interest. Feeds discussed included “All Friends” (what friends have posted in chronological order), “Close Friends”, “Following” (pages, companies, and public figures followed), “Games”, “Most Recent”, “Music” (what people are listening to, what musicians post, articles about musicians, and events), and “Photos” (with Instagram integration).

Mobile Consistency

The goal is to make the Facebook experience seamless across different platforms with less clutter. The mobile Facebook design, which is simpler from the perspective of the user, will be ported to other interfaces. The user will be provided with global navigation without passing through the home page, eliminating the need to hit “Back” and “Forward” in the browser. The News Feed will feel the same across different devices, meaning that what the user views on her desktop computer will be similar to what she sees on her smartphone or tablet. Also, the “New Stories” notification will be brought to the desktop computer. Currently, the position in the News Feed on mobile devices does not change unless the user scrolls up because of the “New Stories” notification at the top of the screen, or scrolls down for older content.

Outlook

We expect the changes to the News Feed to…