Facebook Inc (NASDAQ:FB) is increasingly becoming a major force in controlling the site traffic. But is this a worry, since Facebook can monopolize the site traffic and control it through the power that they have right now through billions of its user base around the globe. A ‘WIRED’ article discussed about the Facebook’s dominance in the internet and how it can influence the future site traffic.
The article mentioned that Facebook Inc (NASDAQ:FB) has turned out to be the major source for sharing online contents to the users and because of this, online publishers fight hard to push their stories higher than the rest to gain user attention. This doesn’t show the change in online publisher’s attitude though; it clearly shows the consumer shift in consuming these online contents. At this rate, a world where no content is available outside Facebook is not very far away.
Meanwhile as a boost to Facebook Inc (NASDAQ:FB)’s monopoly, New York Times media columnist mentioned that Facebook are in talks with online publishers to host their pages directly on the platform, rather than posting as a newfeed and waiting for user to click it. Facebook would obviously share the ad revenue’s though with the online publishers for doing that.
The article stated that online publishers relying on Facebook would someday turn out like publishers relying on Amazon.com, Inc (NASDAQ:AMZN). Amazon was demanding the price reduction from publishers since publishers cannot sell books without the help of Amazon’s web portal. Facebook Inc (NASDAQ:FB) could end up controlling the online publishers in the future.
Facebook Inc (NASDAQ:FB) has a proven method to generate revenues from mobile advertising. Facebook’s 3Q earnings also suggest that more than 60% revenues came from mobile advertising. Almost one-third of Facebook’s users are mobile-only user accounts. So, Facebook has much stronger hold in controlling the mobile traffic. To utilize this many publishers could place their contents within the Facebook’s bounds to get better reach and on the way make some ad revenues. Online publishers who apt to stay out of Facebook walls, might not get the same attention as others, even though they have good enough contents at disposal. But Facebook might not falter in selecting contents to promote, since promoting low quality contents might influence users to migrate outside their wall to search for contents and thereby might lose their hold on controlling mobile traffic.
Facebook Inc (NASDAQ:FB)’s CEO Mark Zuckerberg has shown his interest in promoting video contents and investing a lot in that as well. If a same video posted in YouTube and Facebook gets more likes and views in Facebook compared to YouTube, then that might mark trend in which people start posting directly on Facebook and get more views.
Zuckerberg also expressed his views in owning original contents much like Netflix, Inc. (NASDAQ:NFLX) and Amazon.com, Inc. (NASDAQ:AMZN). This was evident from Facebook Inc (NASDAQ:FB)’s deal with Hollywood studio, Lionsgate to make five short films based on ‘Twilight’ to be aired next year exclusively on Facebook. Facebook’s $2 billion acquisition of Oculus Rift VR headsets also shows company’s intent to catapult ahead in the virtual reality space as well. A fully mature VR headsets might instantly attract customers and Zuckerberg predicts that 50 – 100 million headsets might be sold in the next 10 years.
As of 30 June 2014, David Tepper‘s Appaloosa Management Lp hold around 3.6 million Facebook Inc (NASDAQ:FB) shares.
Disclosure: None
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