What does Facebook’s IPO mean for journalists?

Facebook’s IPO has drawn extensive media coverage, with Journalism.org even listing the variety of news reports on major newspapers, both in print and online.
“Even if Facebook’s not making journalists rich, it’s certainly helping to keep them employed by talking about it!” Andrew Beaujon wrote for Poynter.
But amid all the frenzy of media reports, a less discussed topic is looking at the issue from the opposite side: how will the IPO impact journalists?

CNN’s Kristie Lu Stout discussed this topic in her blog, asking: “Is Facebook a must-buy for journalism?”
Concluding that “Facebook is a social tool for engagement and not journalism,” she explained that Facebook is about consumer engagement, which attracts advertisers.
Journalists have been flocking to Facebook to create content and connections on a platform that the company can use for all time,” Stout wrote. “Not only that, we’re feeding an advertising rival that’s only going to get bigger after Friday’s IPO.

“I’m not quite convinced that Facebook is a must-buy for journalism. After the IPO, I may be holding on to my account, but I’ll be holding off on any extra contributions to the site.

For Stout and many other journalists, social media is used to generate story ideas and interact with audiences. “As for Facebook, I believe its strength can be summed up in the marketing jargon that makes me squirm: ‘personal branding’,” she explained.
Echoing Stout, data journalist and Web developer Dino Beslagic responded to Beaujon’s Poynter blog, stating that Facebook is “a form of ultra-cheap marketing” which helps get “intimate exposure and visibility for your brand.” He added that there was no need for journalists to worry, as Facebook does not take traffic away from news sites; rather, it adds to them.
But as an “advertising rival,” Facebook might not perform as well as expected, GigaOm’s Matthew Ingram pointed out. This is because Facebook’s business model is advertising-based, just like most media companies. And Facebook ads have worse results and “clutter the experience,” Beaujon noted.
The recent action of General Motor’s retreat from Facebook, as reported by the Wall Street Journal, is considered to be an example. Though opponents are arguing that GM’s social media marketing failure was caused by itself rather than Facebook, as reported by Nieman Journalism Lab, there are concerns regarding Facebook’s business model.
“Facebook actually has an even bigger mountain to climb than newspapers or other media entities do when it comes to advertising, since the social nature of the network could actually interfere with the effectiveness of traditional ads,” Ingram wrote.

Image: Gigaom
This entry was posted in Advertising, Facebook, finance, Journalism, media. Bookmark the permalink.

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