Facebook changed the way its 2.2 billion users see news on the social network, destroying the business model of a web publishing startup.
LittleThings, a four-year-old site that developed a following with feel-good stories and videos on Facebook, shut down yesterday and fired its 100 employees. The company blamed Facebook for a drop in readership after the social network changed the way it posts news and entertainment from media companies, Digiday reported.
Gretchen Tibbits, president and COO of LittleThings, said her company lost 75 percent of its audience after Facebook announced the change this year. LittleThings had more than 12 million likes on Facebook, while its “Trending Stories” page has more than 1.3 million likes.
“We’re disappointed. It’s their platform,” Tibbits said of Facebook. “But until earlier this month, what we were doing was working.”
Facebook CEO Mark Zuckerberg in January announced major changes to its flagship social network, including a plan to put more free, user-generated content into its news feed. The company also ran a six-country test of a feature to separate professionally produced material into another section of its website and mobile application.
He said feedback from the community showed that public content had been “crowding out the personal moments that lead us to connect more with each other.”
Facebook's growing power in the media industry worries competitors and policymakers, especially after revelations that the social network is among the companies that Russian agents use to easily distribute political propaganda in the U.S.
Jeff Zucker, the head of CNN, this week called on antitrust regulators to investigate Facebook and search giant Google because the two companies have outsized control of the digital advertising market.
"In a Google and Facebook world, monetization of digital and mobile continues to be more difficult than we would have expected or liked," Zucker said. "We need help from the advertising world and from the technology world to find new ways to monetize digital content, otherwise good journalism will go away."
Digital Publisher Pullback
LittleThings was especially dependent on Facebook to gain viewership of its video clips that people would share with friends, family and followers on the social network. LittleThings produced more live video programs after Facebook prioritized TV-like content to keep people engaged.
After Facebook changed its system, LittleThings’ web traffic declined to 40 million hits from 58 million last May, Tibbits told Digiday.
LittleThings was self-funded and didn’t have support from venture capitalists whose money could help it ride out the drop in viewership. Also, its audience mostly consisted of women over age 30 that advertisers generally avoid because consumers tend to develop brand preferences at a younger age.
“For our audience, there’s not another platform right now,” Tibbits said to Digiday. “There are 100 great, talented people who were here and doing content that resonated with an audience that’s just harder to find right now.”
Other digital publishers also have faced trouble with disappointing sales.
Vox Media last week fired 50 employees, or 5 percent of employees, as the company scaled back online video production. Vox publishes the Racked, Curbed and SB Nation websites.
Mashable in December cut jobs and closed its Asia Pacific office after completing a sale to Ziff Davis.
BuzzFeed, which publishes the Tasty cooking videos on Facebook, in November fired 100 employees, or 7 percent of staff, as the publisher fell short of its sales goals for 2017.
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