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Facebook in 1Q17: Live Sports, Ad Strategies, and Competition

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Part 4
Facebook in 1Q17: Live Sports, Ad Strategies, and Competition PART 4 OF 15

How the War on Fake News Impacts Engagement on Facebook

Facebook escalates war on false information

Facebook (FB) seems to be sparing no effort to rid its platform of intentionally misleading content. In March 2017, the company began assigning “disputed” tags to news stories whose content accuracy is disputed by fact-checkers such as the Associated Press. 

Facebook has escalated the campaign so that people posting or sharing stories on its social network are alerted if they are about to post a story whose authenticity is in doubt.

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Facebook has also embarked on educating its users on how to spot fake news. Users in the US (SPY), the UK (EWU), Germany (EWG), Brazil (EWZ), and Mexico are seeing these tips on how to identify fake news. The tips include a call to be skeptical about sensational headlines and poorly formatted content gleaned from websites whose URLs are designed to closely resemble well-known news organizations.

Effect on platform engagement

While fighting fake news could help Facebook avoid controversies that could hurt its brand, there are risks in taking a more aggressive posture in its platform cleanup efforts. Fighting fake news could provide a distraction, robbing Facebook of resources that could otherwise be used to drive growth.

Also, the company relies on content contributed by users to foster engagement on its social sites, which plays a key role in attracting advertisers. Therefore, if questionable stories have helped drive user engagement on Facebook, then removing them could see the company lose one of its advantages in drawing advertisers.

When Facebook (FB) reports its 1Q17 earnings on May 3, some investors will be looking to see what impact the fake news purge is having on the company’s costs, as well as its advertiser gains and retention.

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