This Is How ‘Instant Articles’ Affect Facebook Stock

This Is How 'Instant Articles' Affect Facebook Stock

The social media company seems to be affected negatively from the criticism being received by major publishers on Instant Articles, as stock price falls

Facebook Inc might not be working on strategies as great as it believes them to be, as news suggests that the social media giant is beginning to face some issues in the ‘Instant Article’ feature that was launching a couple of month back. According to a recent report, it was seen that the social media company’s model to make money out of the new feature was not being approved by the publishers, who claimed that the regulations set by the company on the site were becoming a problem for them to generate money from ads in a proper manner.

Instant Articles is a relatively new feature that Facebook management thought of to give users a space where they can get firsthand information of events taking place around them, without going to a second source. For that matter, the giant needed publishers to put their original content on the website and according to reports, the social networking platform received confirmation from 20 publishers, including some big names in the publishing industry. However, recently The Washington Post and The New York Times have informed the market about how it has been having serious issues regarding generation of revenue following the laws that have been set by the giant, which is becoming an unavoidable problem for the company.

According to the publishers, Facebook business has made guidelines which are rather strict about which kind of ads can be displayed on the site and that has cut down on the variety which would otherwise had opened the flow of revenue in a much wider way. The rules which have become an impeding problem for the advertisers is related to how big the ad can be on the article and if it has a mediocre quality or not, as the feature is not ready to accept anything par the set standards.

The social media giant helps the publishers to make a great amount of revenue from the articles that they publish and are allowed to receive 100% revenue on the ads that are sold by themselves alone, while the company gets 30% of the share if it is the one selling those ads.

All of these issues have affected Facebook stock price in a negative manner, as it experiences a dip of around 3.77% in the last trading session, making the share value to reach $103.95. Analysts in th market, however, have turned out to be bullish about the networking company’s plan to take the whole instant publishing idea forward the way it is doing and has rated it positively for the future.

 

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