Competitive vs. Complementary Effects in Online Social Networks and News Consumption: A Natural Experiment

Using hourly traffic and readership data from a major news website, and taking advantage of a global Facebook outage, we study the relationship between social networks and online news consumption. More specifically, we test if online social networks compete with content providers or instead play a complementary role by promoting and attracting traffic to external websites. During the outage, consistent with a promotional effect, we observe a significant decrease in traffic and unique visitors to the news website lasting beyond the outage hours. We further find that direct referrals from Facebook links grossly underestimated the actual impact of Facebook in generating traffic. Instead, during the outage, we observe a more significant reduction in visitors arriving at the news website from search engines or directly typing the website URL or using bookmarks. Additionally, readership of articles and types of pages viewed also changed during the outage. Although we observe a drop in news consumption during th...