Borrowing a concept from rival Snap, which introduced Stories in 2013, Facebook launched its competitive version three years later. Facebook started by bringing Stories to Instagram, and has since added it to its main app, Messenger and WhatsApp. Stories can focus on a photo of something your cousin sees on the street or a selfie video of a friend with animated puppy ears.
While the feature has proven especially popular on Instagram, it remains unclear just how much traction it’s gained on Facebook’s other apps. Zuckerberg has cautioned that the transition from feed to Stories could be slow, telling analysts that “from a business perspective, feeds will drive the majority of our growth over the next couple of years, at least until Stories become an even bigger driver.”
Maria Ripps, an analyst at Canaccord Genuity, said that investors need to see if Stories is “additive to core News Feed” revenue or if it’s taking money away from the main product.
“Any color around that will be the most important question this quarter,” Ripps said. Canaccord has a “buy” rating on Facebook and a $180 price target.
At the moment, Facebook continues to lure advertisers, who can’t get the type of audience the social network provides anywhere else.
“Facebook might be intrusive and sell your stuff,” said Kim Forrest, a money manager at Fort Pitt Capital Group, which owns about 2,300 Facebook shares. “But apparently for advertisers it works.”
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