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Is Facebook establishing itself as a modern-day AOL?

At the end of last week, Facebook announced a new service that's designed to drive breaking, journalist-verified news towards the eyeballs of interested users. Dubbed FB Newswire, it's different from the standard personalised News Feed that shows you the activity of your friends and (increasingly rarely) the companies you may have liked or followed. This new service is meant to help put a broader swath of content in front of users who are interested in it, but with a promise of verified-true data rather than simply showing you "trending" stories. In doing so, the company is taking another step towards establishing itself as a modern-day AOL.

Don't laugh. While it's easy to sneer at AOL today, in 2000 it accounted for 10 per cent of the global online population. The story of the brand's decline and near-collapse is a classic example of both the innovator's dilemma and dot-com era hubris, but AOL was the Internet for millions of people. The company's flaw, from Facebook's perspective, is that it ran a pay-to-play ecosystem. As users gained expertise, AOL's "user friendly" walled garden ecosystem became more of a hindrance than a boon, while at the same time its failure to aggressively adapt broadband encouraged consumers to hop to other ISPs.

Facebook is reassembling the components of a similar ecosystem, only with an ostensibly free service and an updated approach. Again, it's easy to sneer at the company's failures – it swung for the fences and missed badly with the Microsoft Kin (widely derided as the Facebook Phone). Last year, it introduced the Android-based Facebook Home – an Android application that tried (with varying degrees of success) to essentially re-brand a device as a Facebook extension. It's attempted to co-opt email addresses, launched its own Messenger service (and bought WhatsApp for a cool £11 billion), and, of course, bought out Oculus VR, makers of the originally Kickstarter-funded Oculus Rift.

To some extent, this is what big companies do – they try to identify big trends, then get out in front of those trends to capitalise on emerging opportunities. What's striking about Facebook, however, is the company's increasing ability to shape the rise and fall of other corporations. Zynga's fortunes were closely tied to FB's initial lax policies on acceptable lead generation and advertising revenue, and its fortunes have slumped as the rules tightened up.

Few will shed tears for Zynga's troubles, but Facebook's shifting advertising terms are cause for more concern. In the early days, companies and organisations were encouraged to sign up and use the platform to reach more people. Facebook has since pivoted on that stance, restricting the "organic" reach of many organisations. The term refers to how many users who have liked an organisation actually see the things it posts to its own news feed.

This data, from Adweek, shows how changes to FB's algorithms impacted traffic to various websites:

There are variants of testicular cancer that I like more than Upworthy, so you won't catch me shedding any tears over its precipitous traffic decline, but even websites like the New York Times have taken significant hits. With FB Newswire, Facebook is clearly trying to cosy up to journalists and news media, but it's also flexing its own muscle.

Of course, if you ask, Facebook will tell you that these changes are a response to feedback and that users were complaining about being inundated with meaningless drivel and constant "Like our page!" spam from companies. Is that true? Almost certainly yes. But limiting a brand's organic reach doesn't just improve user satisfaction, it also creates incentive for that brand to pay Facebook for advertising space.

Whose traffic is it?

Social media is essential to most websites these days. Even if you have an enormous built-in audience – and I don't think anyone doubts that the New York Times has its own established readers – we refer to things as "going viral" if they catch fire on social media. Stories are routinely judged based on how often they are shared and how much conversation they stimulate.

In many ways, that's great. Pulling in readers or traffic from Facebook, Reddit, or even *cough* Google Plus is an excellent way to extend the reach of a story or improve a conversation. But it has consequences – news sites are rightly paranoid of being little more than glorified Facebook portals with a scope and reach largely defined by a reliance on one social portal. If a social media site drives the majority of your traffic, it's not your traffic – it's Facebook's.

It could be argued that this is merely a continuation of the trend Google began years ago; the company's SEO rankings and page placement are instrumental in determining how much exposure a brand receives. Research shows that most people rarely click through to Page 2 and a healthy percentage of searchers never even scroll. With Google using an increasing amount of space at the top of search results for advertising, that's the kind of statistic that gives SEO businesses heartburn.

The resemblance between Facebook and AOL could grow even stronger if the company's plans for putting Internet drones in the sky actually come to fruition; at that point, Facebook would actually be serving as an ISP of sorts. Even if they don't, both companies built businesses on the idea of providing a content service that primarily functioned as an Internet experience filter. AOL never prevented its customers from surfing the normal web, either through the AOL-included browser or via a standalone installation, and Facebook certainly has no plans to block its users from accessing other websites or social media.

Nonetheless, it's actively pushing to become the framework through which people experience the Internet – and by inexorable extension, a gatekeeper of the kinds of content that users see or don't see. As my colleague Sebastian Anthony presciently described way back in 2011, feeding so much information into a single service like Facebook or Google could have awesome results – but it could also be terrible as well.