Facebook Inc (NASDAQ: FB) has pulled the public trigger on its newest product innovation, Instant Articles. The service, which will allow news pieces from chosen publisher to open directly inside the Facebook application on mobile, is a direct shot at Google Inc (NASDAQ: GOOG), (NASDAQ: GOOGL) and one that add to several similar attempts to derail the power of web search.
According to a blog post made by Michael Reckhow, the Facebook Product Manager in charge of instant articles, the service will include content from nine publishers to begin. The New York Times, Buzzfeed and the National Geographic will be a part of the service to begin with.
Facebook launches Instant Articles
According to Mr. Reckhow, the new service will allow articles to load up ten times faster, turning one of the slowest types of content into an instant experience. On top of that “Instant Articles introduces a suite of interactive features that allow publishers to bring their stories to life in new ways.”
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Facebook Chief Product Officer Chris Cox is characterizing the service as “a tool that enables publishers to provide a better experience for their readers on Facebook.” Publishers will be able to choose to monetize the articles by filling them with their own advertising or to share the revenue with Facebook through the company’s Audience Network.
The application will initially launch with a limited set of articles from the Facebook partners, and only be available for the social network on the iPhone.
The full list of publishers is as follows: New York Times Co (NYSE:NYT), National Geographic, Bild, Spiegel, Buzzfeed, BBC, The Guardian, The Atlantic, and NBC. That covers a huge amount of news consumption in Germany, the United States and the United Kingdom,
Facebook kills news search
If people see news of Facebook, most of the time they have to open a browser or another application in order to get the full story. That leaves them open to using the Google search engine keeping precious information and ad dollars away from Facebook. Instant Articles gives an alternative to doing that, and keeps them inside Facebook’s garden.
In combination with the “mobile cage” that is the “Add a Link” feature Facebook is currently testing, Instant Articles could be a significant product in the fight against Google. Mark Zuckerberg, Chris Cox, and Facebook’s other executives are, if not on the offensive, certainly setting the lines along which that battle will take place over the coming years.
Biran Novak of Morgan Stanley is a big fan of the way Facebook has been innovating in recent months. He rates the company at “Overweight” and has a $94 price target on the firm’s shares. He thinks that innovations like Instant Articles will increase engagement, and increase the amount of user data Facebook has on hand, leading to higher revenue per user.
Paul Vogel of Barclays is equally a fan of Facebook’s engagement advantage, but the analyst reckons that Video is the massive upside for the company going forward. Instant articles with its “suite of interactive features” may add in to that vision.
Update 12:30 EST: Benjamin Swinburne of Morgan Stanley weighed in on the Facebook innovation today and said that during the first quarter Facebook is just about to pass Google in getting its hands on incremental ad dollars. That means that when businesses are going to spend an extra dollar they are more likely to send it to Menlo Park than they are to Mountain View.
The Morgan Stanley team said that the first quarter was an abnormally dreary one for online advertising, but warned there might be more of the same on the way. There’s a risk to expectations in the second half of the year according to the research.
Facebook’s Instant Articles may be enough to finally become the most incrementally attractive ad seller in Silicon Valley. That could protect it from the weaker second half of the year predicted by Morgan Stanley.