There are lots of uncertainties about Facebook’s future, but one thing is for sure: CEO Mark Zuckerberg has been busy making big changes.
Earlier this month, he announced a drastic overhaul of the social network’s vaunted news feed. Facebook will soon put more focus on posts from family and friends and less emphasis on content from brands and media outlets. He’s also asking the site’s 2 billion users to decide what Facebook should pass for trusted news sources. Those tweaks, he says, may lead people to spend less time on the site, causing Facebook’s business to take a hit.
Zuckerberg said Wednesday that changes made in the last quarter have already caused people to spend less time on the platform. He said people spent roughly 50 million fewer hours on Facebook every day.
We won’t know the complete effect of the changes for a while, but if Zuckerberg is right about the impact it could have on Facebook’s business, he’ll probably look back longingly at the revenue posted Wednesday.
In the quarter ended December 31, Facebook took in $12.97 billion in sales, beating Wall Street estimates of $12.55 billion. Facebook’s user base rose to 2.13 billion a month, a 14 percent jump from the same time last year.
Profit was $1.44 per share, missing estimates of $1.95 per share. Facebook said that was due to the tax bill impact. If you add it back in, the figure jumps to $2.21 per share.
“2017 was a strong year for Facebook, but it was also a hard one,” Zuckerberg said in a statement. “”In 2018, we’re focused on making sure Facebook isn’t just fun to use, but also good for people’s well-being and for society. We’re doing this by encouraging meaningful connections between people rather than passive consumption of content.
“Already last quarter, we made changes to show fewer viral videos to make sure people’s time is well spent,” he continued.
Facebook’s stock fell more than 4 percent in after-hours trading.
The earnings results caps off a tumultuous year for Facebook. The social network is being blamed for creating “filter bubbles” that warp people’s sense of reality, because the site’s influential and mysterious algorithms tend to show Facebook members content they already agree with.
Facebook was also battered by critics for its role in the 2016 US presidential election, in which Russian agents misused Facebook — along with rival platforms Google and Twitter — to push misinformation and sow discord among Americans.
After first dismissing claims that Facebook was part of the “fake news” problem, Zuckerberg said in January that his primary goal for 2018 is “fixing” the sites biggest problems, including misinformation, harassment and election integrity.
Part of that plan has been to give the news feed — essentially the soul of Facebook and its main financial engine — a makeover. That includes deprioritizing news stories and viral videos, which Zuckerberg said could trigger a drop off in how much time people spend on Facebook. Facebook often touts that 20 percent of all the time people spend on mobile devices is spent on Facebook.
And earlier this week, he said Facebook would push stories from local news outlets on the news feed — instead of national news, which tends to be more polarizing.
“I want to be clear,” he wrote in a Facebook post outlining the shift from news to content from family and friends. “By making these changes, I expect the time people spend on Facebook and some measures of engagement will go down. But I also expect the time you do spend on Facebook will be more valuable. And if we do the right thing, I believe that will be good for our community and our business over the long term too.”
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