Facebook stock: Investors don’t like the news feed change

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Facebook announced Thursday it would prioritize posts from family and friends in users’ News Feeds over content from publishers and brands in order to ensure more “meaningful interactions” on the platform.

Following the news, Facebook’s stock price dropped about 4%:

In his announcement of the move, Mark Zuckerberg said that he expects “the time people spend on Facebook and some measures of engagement will go down.”

How the changes will affect Facebook’s business in the long run isn’t clear, but given the company’s earning power, an algorithm tweak may not matter much. The company contends that the change reflects what users want: updates from their connections rather than news or brand content.

The media industry, however, will likely take a hit, since many digital outlets depend on Facebook for distribution. Their website traffic is likely to drop without the Facebook referrals—and thus their advertising revenue.

Jason Karaian contributed reporting.

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