The eventful January continued for Facebook, Inc. (Nasdaq: FB) investors on Tuesday after the company announced it will make changes to emphasize local news in users’ News Feeds.
The latest announcement is one of several key changes CEO Mark Zuckerberg is making in an effort to “fix” Facebook ahead of the company’s fourth-quarter earnings report on Wednesday afternoon.
In a post on Facebook, Zuckerberg said the decision to include more local news content in News Feeds was inspired by conversations he had with Facebook users during a tour of the U.S. last year.
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“When I traveled around the country last year, one theme people kept telling me is how much we all have in common if we can get past some of the most divisive national issues,” Zuckerberg wrote. “Many people told me they thought that if we could turn down the temperature on the more divisive issues and instead focus on concrete local issues, then we’d all make more progress together.”
Improving user experience has been the central theme of several major changes Facebook has made to its platform so far in 2018. In recent days, the company announced the creation of a new privacy center where users can easily access and understand all important privacy settings in one location.
Earlier this month, Zuckerberg said Facebook will be reducing the amount of News Feed content from publishers and advertisers and increasing the amount of content from friends and family. Zuckerberg said the changes may reduce the total amount of time spent on Facebook, but they will improve overall user experience.
KeyBanc analyst Andy Hargreaves says investors shouldn’t be concerned about changes to the News Feed, and creating a quality user experience is the right long-term priority for Facebook.
“The company is actively taking steps to address societal concerns, continues to develop tools to increase ad effectiveness and is developing platforms to improve the volume of visual ad inventory available for brand advertisers, which can accelerate share gains from TV,” Hargreaves says.
[See: 7 of the Best Stocks to Buy for 2018.]
On Wednesday afternoon, Hargreaves says investors should focus on Facebook’s rising expenses, commentary on Watch streaming video and growth in advertising cost per 1,000 impressions (CPM). KeyBanc estimates fourth-quarter CPM increased 35 percent.
KeyBanc also expects Facebook to report earnings per share of $2.05 on revenue of $12.61 billion, beating consensus forecasts of $1.94 and $12.51 billion.
KeyBanc has a “buy” rating and $220 price target for FB stock.
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Facebook, Inc. (FB) Wants to Show You Local News originally appeared on usnews.com
