Facebook’s Decision To Turn Its Focus Off News Affects MailOnline

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    Photo via Daily Mail

    The retreat of Facebook from news has brought to end to years of rapid expansion by MailOnline, the celebrity-fuelled website of DMGT, and prompted its investors to question the growth prospects of the publisher.

    DMGT disclosed that the revenues of MailOnline increased by only £1m during the first half of its financial year, to £61m.

    The number of visitors of the website was down by 9 percent on last year after Facebook changed the site’s newsfeed algorithm amid a row of controversies over “fake news” and its role in political debates. The social network modified its systems to show fewer news stories and more personal updates from family and friends. Google has also changed its algorithms to favour original and quality reporting.

    MailOnline employs over 600 editorial employees and the change meant that it got fewer visitors despite a rise in the number of those coming directly to its website and apps. Revenue growth plunged from 35 percent last year to 2 percent. On a like-for-like basis, the sales growth of MailOnline dropped from 19 percent to 5 percent.

    Investors were concerned after years in which the rapid expansion of MailOnline was at the centre of the effort of DMGT to navigate the decline of newspapers.

    Previously, it was more than making up for the declining sales of the Mail on Sunday and Daily Mail. However, the troubles being experienced by the website during the past six months meant that the overall revenues of Mail slipped by 3 percent.

    The worry was compounded by a wary outlook for the second half of the year from Paul Zwillenberg, its chief executive, with a hint of “challenging conditions.”

    Zwillenberg stated: “It’s frustrating trying to keep up with the ever changing whims of large partners like Facebook, luckily Facebook or Google cannot break our business.”

    DMGT dropped by 10 percent, wiping out its recent gains amidst of the £640m sale of its stake in the owner of Zoopla. DMGT has not disclosed its plans for the cash.

    Earlier this year, the publisher of MailOnline, Martin Clarke, informed the investors: “despite all the changing tech fashions of the past decade and the incredible changes in the digital ecosystem, our revenue growth has remained incredibly consistent”.