For Facebook, the roller-coaster ride of 2017 saw revenue for the world’s largest social network climb. But the drop in North American users — and the time they spent on the platform — made investors’ stomachs churn.
The company beat expectations for this last holiday quarter, with its reported $12.97 billion in revenue topping the $8.8 billion it saw in the same quarter in 2016. With that, 2017 revenue amounted to $40.65 billion, up from $27.64 billion in 2016.
Earnings last year rose to $15.93 billion, from $10.22 from 2016.
Globally, Facebook’s daily active users last quarter reached 1.4 billion, up 14 percent compared to last year. The figure shows growth, but at a less impressive rate than investors are used to seeing. And in Canada and the U.S., daily active users actually fell, from 185 million in the third quarter to 184 million.
Chief executive officer Mark Zuckerberg essentially considers it a growing pain, as he pushes the platform to focus less on passive content and more on “meaningful interactions” between users and the people in their lives.
That may be a simple statement, but it covers an array of maneuvers — from newsfeed changes that separated content between personal connections and Pages, to cutting viral videos. “Last quarter, we made changes to show fewer viral videos to make sure people’s time is well spent,” he said. “In total, we made changes that reduced time spent on Facebook by roughly 50 million hours every day.”
He could be as genuinely happy about this as he seems, or he may be honing his powers in the art of spin. Either way, it emphasizes a shift in thinking that could bring more fundamental changes in 2018. The tech community and every business that relies on Facebook, Messenger, Instagram, Oculus and WhatsApp may be bracing for the company’s upcoming F8 developer conference this spring. Some of those announcements may springboard off of wins, like WhatsApp reaching 1.5 billion monthly users, or Instagram’s success with Stories. But the rest could enlist software makers in whatever else the company has up its sleeve.
During the last earnings call, Zuckerberg did warn investors of expenditures that may affect his bottom line, including his plans to boost personal connections, hire staffers to augment security and battle the fake news that has become epidemic on his platform. Now, he’s doubling down on human relationships — and, he maintained, the move will actually wind up being a smart business move. Eventually.
“If we do our jobs well, it should increase the number of meaningful interactions that people have and we think that that’s going to be positive,” he said. “So we think it will help make the community stronger over the long-term and we think it will be good for the business over the long-term.
“This is what people are telling us; it’s what they want on the product,” he added.