FB Stock: This New Facebook Feature Could Be A Big Growth Driver

Facebook Stories could win back publishers for Facebook Inc (NASDAQ:FB) after Instant Articles failed to strike a chord.

FB Stock This New Facebook Feature Could Be A Big Growth Driver
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After having risen nearly 50% in the Year-to-date, a common question which intrigues many investors is how far Facebook Inc (NASDAQ:FB) stock can go this year? Amidst increasing voices of growth concerns, the social networking giant has proved its detractors wrong delivering solid earnings results once again. The Menlo Park, California-based company has been working on new features to address the growth concerns on its core platforms. The latest feature which has been in the news recently is Facebook Stories feature coming to its desktop platform. This feature is an extension of the highly popular Instagram Stories which has over 250 million daily users. Stories are a way to share multiple photos and videos which appear together in a slideshow format: your story. Critics also have been quite critical of the Facebook Stories feature on the mobile platform. However, if some recent reports are anything to go by this feature could be a great future growth driver for FB stock. Facebook Stories could help the company attract more publishers to its platform after its Instant Articles failed to take off as intended. Facebook's Instant Articles is the mobile web format that makes news articles load more quickly on Facebook.

Facebook Stories for News.

The social media giant has been lagging Alphabet's (NASDAQ:GOOGL) Google on the 'article form' content which has found a better response from the publishers to its 'Accelerated Mobile Pages (AMP)' platform. Facebook had also witnessed an outflow of publishers from its 'Instant articles' format to AMP. However, this could change with news-focused Facebook stories. Competition from Google also happens to be there in this space. A Wall Street Journal post reports that Google doesn't want to lag further behind in the Stories war. It is reportedly planning to launch "“Stamp,” which combines Snapchat’s Stories format with Google’s own Accelerated Mobile Pages." This initiative by Google will allow news outlets to share slideshows of photos, videos and text that appear in search results, but also can be hosted on a publisher’s website.

In spite of the competition from Google in the stories for news space, Facebook Stories does make more sense. Though Facebook Stories have not been well received initially, they could be of more value add if one thinks them as news-focused complement to Instagram Stories. A TechCrunch post reports that the social media company could open its Stories to publishers, "and hope their content will make its Stories more popular and lure users into sharing their social Stories there, too." Facebook has already started allowing public figures share Stories to their followers, not just friends. The introduction of public Stories could see the next journalism platform shift. Publishers like New York Times, Buzzfeed and individuals "who have big followings for their articles on Facebook could now use Stories for raw and immersive looks at the news, combining monologues, screenshots and interviews".

Facebook has a slight edge over Google here. Users are already acquainted with the Facebook Stories feature and now, with stories on the desktop as well, it expands stories' reach to its entire universe. Facebook stories may not have been hugely popular but even if it manages to convert just 10% of its entire user base to use Facebook stories daily, it's a massive 200 million. These numbers are equivalent to a Snap Inc's (NYSE:SNAP) Snapchat user base and enough eyeballs to attract more publishers and advertisers.

Stories also solve many of the shortcomings of YouTube-style multi-minute videos and TV broadcast news segments, Instant Articles and AMP, hence they are becoming extremely popular among users as well as publishers and advertisers. If Facebook Stories for social news takes off then the company can also "gain more data on what people care about and serve more lucrative video ads wherever Stories are shown." Already ads in Instagram stories are getting a great response as stated by Facebook COO, Sheryl Sandberg in the last earnings call. To quote Sandberg on this: "Instagram Stories are growing incredibly well and are, therefore, a big opportunity for marketers. From driving brand awareness to increasing sales, businesses can now use full-screen Instagram Stories ads for any goal." If the company eventually introduces similar ads in Facebook stories, the company would be offering another targeting opportunity for advertisers making the platform more appealing to marketers. This would also mean another growth opportunity for the company.

Summary.

Facebook's Instant articles may not have seen the success the company hoped it to be. However, if the Mark Zuckerberg led company can make the Stories for news work, then they could breathe new life into news consumption with ostentatious, no-filler style. This could be also Facebook's strong response to Google after Instant articles in 'article form' content and a new growth opportunity for the company going ahead. FB stock has many other growth opportunities other than these. Facebook stock still is a great long-term buy and recent analyst price target hikes suggest it is $200 plus stock.

Facebook stock is also among our top stock picks from the technology sector, which have outperformed the NASDAQ by over 156%. In case you are looking for fundamentally solid auto stocks, do take a look at our top auto stocks, which have crushed the S&P 500 by an impressive 241%. If you are a technician interested in short-term trades, do check out our daily trading ideas section, which consists of ideas that are updated daily. If you like them, do share them and feel free to recommend us to your friends.


Sreekanth Anasa Sreekanth Anasa   on Amigobulls :

Neither Amigobulls, nor any members of its staff hold positions in any of the stocks discussed in this post. The author may not be a certified/registered investment advisor, and the opinions expressed should not be treated as investment advice.

Buying and selling of securities carries the risk of monetary losses.Readers/Viewers are advised to carry out their own due diligence and consult their investment advisors before making any investment decisions.

Neither Amigobulls, nor the author have any business relationship with any of the companies covered in this post.

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