Facebook (NASDAQ: FB) is working on a dedicated news tab featuring high-quality journalism. Mark Zuckerberg recently shared the idea in an interview with Mathias Dopfner, CEO of German publishing house Axel Springer.
Zuckerberg says Facebook would take a more hands-on approach to provide users with high-quality, trusted content by developing direct relationships with publishers. That might even include paying publishers directly in exchange for putting their content in this dedicated section.
Interestingly, Zuckerberg went public with this idea just after Apple (NASDAQ: AAPL) announced News+, its $10-per-month magazine and newspaper subscription service. He also made a point to say the proposed news tab would be different from Twitter (NYSE: TWTR), which is also heavily focused on news content.
But Facebook's track record working with publishers or persuading people to use new features in its flagship app isn't so great. Will a dedicated news tab be any different?
A refresher on some recent Facebook history
Facebook has experimented with dedicated feeds for content from sources other than your Facebook friends in the past. In October 2017, the company launched the Explore tab in six countries. Anything from a Facebook Page (including the pages of businesses) could be found in the Explore tab, while the traditional News Feed exclusively featured posts and updates from friends.
After six months, the results were conclusive: "People don't want two separate feeds," Adam Mosseri, Facebook's head of news feed, wrote. Not only did engagement drop, but it led to a surprising increase in the spread of misinformation, according to publishers in those countries.
Facebook has faced a similar struggle in getting users to engage with its dedicated video tab, Watch. The company claims there are 75 million daily active users on Watch, viewing an average of 20 minutes of video per day. Those are pretty good numbers, but traffic is heavily reliant on the friend-based News Feed.
Clicking through to Watch from a video posted on a News Feed hasn't translated into direct engagement with Watch later. That's evidenced by the gap between Watch's daily active users and monthly active users -- 75 million and 400 million, respectively. Facebook's core platform consistently sees about two-thirds of its monthly users visit every day.
Would a dedicated news tab be any different?
A big difference between Watch and the proposed news tab is that Facebook is considered a key source for news. Forty-three percent of U.S. adults get news on Facebook, according to a Pew survey. That compares with just 12% who use Twitter for news. That said, a larger percentage of Twitter users get news from Twitter than Facebook users get news from Facebook.
Facebook remains more closely associated with news than it does with on-demand streaming video. Zuckerberg suggested maybe 10% or 20% of Facebook users want to actively consume news on its platform.
There's clear demand for a more trusted source for news. Apple News+ attracted 200,000 subscriptions within 48 hours of launching. That's just a small percentage of Apple's 85 million monthly active users for its free News app, but it's indicative of the pent-up demand for such a service.
Facebook could combine the benefits of high-quality journalism like that found in News+ with the discoverability and free-to-use benefits of Twitter to offer a very attractive product.
Zuckerberg suggested the company would be fine if it were to break even on the project. "We're coming to this from a very different perspective than I think some of the other players in the space, who view news as a way that they want to maximize their revenue," he said in the interview.
That comment is perhaps more telling of Facebook's true ambitions with the proposed dedicated news tab. It's not looking to increase engagement or make more money directly from news. Instead, the news tab could be used as a way to combat the negative sentiment that's been cultivating around how news and content get shared on Facebook.
Facebook has already taken steps to focus News Feeds on friend-created content. Having a dedicated news section for users interested in politics and current events could allow Facebook to skew the News Feeds toward friends' content even more, further drowning out some of the untrustworthy news sources. Meanwhile, Facebook can point to the dedicated news tab as a major effort to combat the spread of disinformation.
If the news tab can give users a more positive experience while using Facebook, the company will be able to grow revenue and earnings through better engagement and ad sales in other parts of the app.
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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. Adam Levy owns shares of Apple and Facebook. The Motley Fool owns shares of and recommends Apple, Facebook, and Twitter. The Motley Fool has the following options: short January 2020 $155 calls on Apple and long January 2020 $150 calls on Apple. The Motley Fool has a disclosure policy.