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Mark Zuckerberg Loses $3.3bn From His Fortune After Facebook News Feed Change|RN

Adam Lusher
Mark Zuckerberg standing in front of a stage            © Provided by Independent Digital News & Media Limited  

Mark Zuckerberg’s decision to change the way Facebook operates people’s news feeds has cost him $3.3bn, with his personal net worth dropping by 4.4 per cent, it is believed.

After Facebook went public with the news feed change on Thursday, the website’s share value dropped by nearly four per cent before US markets opened on Friday.

By close of business on Friday Facebook shares were trading at $179.37, down more than 4.4 per cent on Thursday’s price of $187.77.

And Forbes has calculated that for Mr Zuckerberg, the co-founder, chairman and CEO of Facebook, this translated into a personal hit of 3.3bn – a 4.4 per cent fall in his personal fortune.

Mr Zuckerberg, 33, who started Facebook in 2004 aged 19, still owns a 17 per stake in the company, which went public in 2012.

He explained his reasons for changing the news feed algorithm in a Facebook post on Thursday, saying he wanted the website to prioritise posts from friends and family over businesses and brands.

“We built Facebook to help people stay connected and bring us closer together with the people that matter to us,” he said. “But recently we’ve gotten feedback that public content — posts from businesses, brands and media — is crowding out the personal moments that lead us to connect more with each other.

“Based on this … . I’m changing the goal I give our product teams from focusing on helping you find relevant content to helping you have more meaningful social interactions.”

Some, however, have suggested that the change might also have been influenced by Facebook’s alleged desire to counteract what the company is believed to refer to as “context collapse”.

This is the phenomenon where people stop sharing as much information about their personal lives on Facebook, yielding less useful data for the advertisers on whom Facebook relies to make its money.

Tweaking the news feed to encourage people to talk about their personal lives might, therefore, be seen as a means of increasing Facebook’s commercial value.

The markets, though, appear to have reacted badly to the news feed change, at least in the short term.

a screenshot of a cell phone: facebook-share-price.jpg© Provided by Independent Digital News & Media Limited facebook-share-price.jpg Some analysts, however, think the tweak will work well for the company in the long term.

Mark Mahaney, an analyst at RBC, told Bloomberg: “Making the feed more relevant should boost user and engagement growth over time.

“We believe these changes will be beneficial to Facebook in the medium and long term.”

Just how much Mr Zuckerberg will worry about the short term drop in his wealth is also unclear.

Given that Facebook shares were trading at around $127 in January 2017, the company’s value is still up by more than 40 per cent year-on-year, even after this week’s fall.

Despite losing $3.3bn, Mr Zuckerberg is still worth $72.4bn (£52.7bn) – and, anyway, it’s not as if he intends to hold on to his Facebook shares.

Mark Zuckerberg standing in front of a stage

 

In December 2015 Mr Zuckerberg and his wife Priscilla Chan said they were planning to give away 99 per cent of their Facebook shares over the course of their lives.                 (The Independent)

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