One of Facebook’s core statistic doesn’t look so good. Time spent on the network— a number that drives the tech giant’s revenue — is down by an estimated 50 million hours per day.
Facebook now reaches 2.13 billion people per month and has 1.4 billion daily active users. If we were to revisit that 50 million hours number on a per-user basis, it would be a drop of 0.035 hours aka 2.1 minutes per user per day.
For CEO and co-founder Mark Zuckerberg, that’s a necessary drop for his company’s future success. Zuckerberg announced the news Wednesday as part of Facebook’s quarterly earnings, reflecting on its 2017 revenue and spending, and the future of the company. Facebook’s stock was down nearly 5 percent in after-hours trading. Zuckerberg knows it won’t be pretty going forward either.
“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.”
The world’s largest social network (a.k.a. advertising giant, election manipulator, virtual reality device manufacturer) is far from dead. This is Facebook we’re talking about. The site traffic isn’t everything when it comes to financials. Revenue from Facebook ads is driven by actual clicks. Facebook still brought in $4.26 billion in profits last quarter.
With Zuckerberg at the helm, Facebook is pushing itself to become a place where people enjoy themselves and genuinely want to keep coming back.
“Already last quarter, we made changes to show fewer viral videos to make sure people’s time is well spent. In total, we made changes that reduced time spent on Facebook by roughly 50 million hours every day. By focusing on meaningful connections, our community and business will be stronger over the long term,” Zuckerberg’s statement continued.
Money isn’t an issue for the company. Revenue reached $12.97 billion for the fourth quarter of 2017, up 47 percent from last quarter. Earnings per share came out below analyst’s estimates, $1.21 compared to $1.94 projected. However, Facebook made sure to note the U.S. tax bill affected its overall gains. Had that one-time charge not been taken into account the result would have been $2.21, beating expectations.
For Facebook, revenue is all about smartphones. Mobile advertising revenue now makes up 89 percent of overall ad revenue, up from 84 percent a year prior.
Facebook’s 2018 has been rocky so far after the company announced a shift in its ideology. After years of helping fuel growth among digital-first media companies with Facebook Page, the company said it would decrease their influence in the News Feed, dropping it to 4 percent. Instead, Facebook is prioritizing posts shared by friends and family.
That change is far from Facebook’s only worry. The company is dealing with the backlash of incidentally spreading Russian propaganda during the 2016 presidential election and the overall presence of fake news on the site. Facebook is also combatting hate speech and violence. Last year, U.S. lawmakers grilled Facebook, as well as Twitter and Google, on these practices and demanded that the companies make changes, in particular with transparency on political ads.
Separately, Facebook continues to be criticized by its own community for negative impacts on mental health and data privacy. Facebook effort to create an app to help children communicate inspired protest from the that it would negatively affect their wellbeing.
But not everything is negative on Facebook’s horizon. A new initiative Facebook Watch, a hub for high-quality video, is gaining traction among users, media publishers, and Hollywood studios. Facebook’s virtual reality division Oculus is launching a new headset in China thanks to a partnership with Xiaomi.
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