Saturday, July 28, 2018 /11.38AM / AngelList Weekly / email@example.com
Facebook had a terrible, horrible, no good, very bad day.
After the company’s quarterly earnings call with investors, FB's stock price dropped ~20% in after-hours trading. Over $100B in value disappeared in an instant after FB announced disappointing revenue numbers and user growth.
Some context: that's comparable to the entirety of General Motors, Ford and Target... combined.
Why did the stock tank? A perfect storm hit one of Facebook’s core features, the News Feed:
But the most interesting change to the News Feed: the rollout of stories, a well-received but not-well-monetized feature that could change how most people use Facebook and their products altogether.
Stories might actually break Facebook
Stories – tappable, full-screen photos and videos – are replacing news feeds everywhere. The format was originally pioneered by Snapchat. In fact, right after Snapchat launched stories in 2013, Facebook tried to acquire them for $3B.
Facebook worked around the failed acquisition by copying Stories inside Instagram (and then in Messenger... and then in Facebook itself).
Instagram stories took off, with 250M+ users engaging with the feature less than a year after its launch. That's over 50% of Instagram users... and close to double the number of Snapchat daily active users.
Unfortunately, the success of Stories might shoot Facebook's ad revenues in the foot. Companies are still figuring out how to build the ad units – engaging, vertical video ads that users won't immediately tap past. Rest assured that #content creators everywhere are working to make Story ads profitable.