Facebook is losing customers because the website is becoming increasingly commercialized. Richard Greenfield, an analyst for BTIG, argues that Facebook’s increasingly cluttered News Feed and numerous ads are driving customers away.
The researchers findings specifically focus on Sponsored Posts which are now found on the Facebook mobile and desktop platform. Greenfield argues that Sponsored Posts add no value whatsoever to social context.
Greenfield’s report arrives on the same day that Facebook announced plans to offer a Twitter type hashtag option. The hashtag shift is already being viewed as yet another attempt by Facebook to grab a piece of the internet’s search advertising space.
Greenfield believes that hashtag use combined with other advertising is causing the “signal to noise ratio [to] skyrocket” on Facebook feeds.
The analyst argues that Facebook’s current moves have already caused users to slowly back away from the network. Greenfield writes:
“Activities critical to the health of Facebook’s social graph are suffering as legacy users are no longer actively adding friends and status updates tend to be content simply dumped into Facebook from other applications such as Instagram and Twitter.”
Greenfield admits that Facebook’s changes to its News Feed (we covered the changes HERE) could help make for a more intimate experience, although those changes have not rolled out to all users at this time.
BTIG issued a sell notice for Facebook shares back in February.