Facebook’s trending topics section will show up on the top right of your News Feed. It will include interesting content from your friends as well as news from the whole network. This is certainly a major change for the company — after all, the mission has always been about connecting with your friends.
But with the trending feature, users won’t be getting a sense of what the community is thinking. They’ll be getting something else entirely: monetization.
Trending topics can be a way to snag much more ad revenues, especially for real-time events, such as the Superbowl or the Oscars. Those kinds of events can provide for some nice tie-ins with traditional media campaigns.
While all this sounds great, Facebook faces challenges. Let’s face it, Twitter is the top-of-mind place for users who want to make quick comments to the world. The user interface is built explicitly for that purpose. But Facebook is really about sharing photos and videos. Oh, and its NewsFeed feature is also not conducive for breaking news either. If anything, the stories I find on there are mostly old news!
Despite all this, Facebook has remained obsessed with taking on Twitter. (Don’t forget that CEO Mark Zuckerberg tried to buy the company just a few years ago.) Consider that Facebook recently launched its own hashtags as well. Although, it is far from clear if that feature has gotten much traction since its launch.
All in all, these knock-off moves should be scary for FB shareholders. They strongly suggest that Facebook’s innovation well continues to be dry. What has Facebook done that is unique or interesting lately? Not much at all. And certainly nothing successful (I’m looking at you, Facebook home.) All of this is a key reason that users have been moving over to rival services like SnapChat and Pinterest.
So TWTR stock investors shouldn’t bee to scared by this news, and FB investors shouldn’t get too excited, either.
Tom Taulli runs the InvestorPlace blog IPO Playbook. He is also the author of High-Profit IPO Strategies, All About Commodities and All About Short Selling. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.