Facebook users spent 50 million fewer hours a day on it in 2017 : Facebook said that time spent on the social network fell at the end of last year by about 50 million hours a day, even before the company made changes to its flagship News Feed that may further reduce user engagement.
Facebook’s 1.40 billion daily active users was up 14 per cent from a year earlier, but below analysts’ estimate of 1.41 billion for the fourth quarter, according to financial data and analytics firm FactSet. The number of daily users in the United States and Canada actually fell to 184 million from 185 million a quarter earlier.
Facebook users spent 50 million fewer hours a day on it in 2017
Facebook reminds the world that Facebook only cares about Facebook
Chief Executive Mark Zuckerberg said in a statement that the reduction in time spent during the quarter reflected changes to show fewer viral videos “to make sure people’s time is well spent.”
The 50 million fewer hours per day was compared with the prior quarter and excludes engagement on Facebook’s Instagram, Messenger and WhatsApp products, the company said.
“I think that the reduction of 50 million hours per day is spooking investors. That comes out to 2 minutes per day in lower engagement,” Wedbush Securities analyst Michael Pachter said.
Facebook, founded in a college dormitory in 2004, has become one of the world’s most valuable corporations by selling internet ads that it puts in front of people on Facebook and on its Instagram unit.
Facebook shares were up 43 per cent during the past year as of Tuesday’s close. The S&P 500 Index rose 24 per cent during the same period.
Zuckerberg, though, this month described Facebook as being at a crossroads, as the world’s largest social media network seeks to stem the spread of disinformation in elections and in daily life.
Facebook sent a tremor through US politics last year when it said that Russian agents used Facebook to try to sway American voters from 2015 to 2017, an allegation that Moscow denies. Facebook said 126 million Americans may have seen Russian-backed political ads and posts.
Plans to shake up the News Feed, Facebook’s centerpiece product, to prioritize posts from friends and tamp down sensational media threaten to cut customer engagement, Zuckerberg has warned.
The News Feed changes came too recently to affect results for the quarter ended December 31. Going forward, though, they could be a positive for the company if Facebook becomes more enjoyable and a better place to advertise, analysts from Deutsche Bank said in a research note on Sunday.
“Users could see brands and advertisements even more closely aligned with their needs and desires at a given time… potentially making for greater ad performance and thus justification for higher prices for Facebook ads,” Deutsche Bank said.
Facebook does not give revenue guidance, though it does project expenses and said in November that expenses would likely grow 45 per cent to 60 per cent during 2018. The spending spree includes new warehouses full of servers and thousands of new workers to review content posted by users.