MENLO PARK — Facebook CEO and co-founder Mark Zuckerberg said Wednesday that users are spending less time on the social network as the tech firm overhauls the type of content they see on the site.
But for the 33-year-old tech mogul, the quality of time matters more than the quantity.
“When people are spending so much time passively consuming public content that it starts taking away from the time people are connecting with each other, that’s not good,” Zuckerberg said in a conference call after the company reported its fourth-quarter results. “So let me be clear: Helping people connect is more important than maximizing time they spend on Facebook.”
The company reduced time spent on Facebook by roughly 50 million hours every day, or 5 percent, in the final quarter of 2017, he said. Among other changes, the social media company has been showing users fewer viral videos.
At first, Facebook’s shares fell by more than 4 percent in after-hours trading to $177.92 per share, despite reporting adjusted quarterly earnings and revenue that beat Wall Street’s expectations. But its stock rebounded, rising by more than 2 percent to $191.77 per share during a conference call with Facebook executives and analysts.
Zuckerberg said he thinks the changes are good for the business in the long term.
“The most important driver of our business has never been time spent, by itself,” he said. “It’s the quality of the conversations and connections, and that’s why I believe this focus on meaningful social interactions is the right one.”
Excluding a one-time tax expense, Facebook reported earnings of $2.21 per share from October to December, which beat Wall Street’s expectations of $1.95 per share. The earnings for the fourth-quarter and full year were adjusted to account for a one-time charge of $2.27 billion that stemmed from the 2017 Tax Cuts and Jobs Act.
The tech firm grew its revenue by 47 percent to $13 billion in the fourth quarter, above the $12.5 billion in sales that analysts surveyed by Bloomberg expected.
“The business is doing great at the present time, but there are all these problems that are building, and it’s expressed in the reduction in time spent,” said Brian Wieser, an analyst with Pivotal Research Group.
As of December, Facebook had 2.13 billion monthly active users worldwide, an increase of 14 percent compared to the same period of the previous year.
The tech firm, though, saw its daily active users in the United States and Canada drop from 185 million to 184 million from the third to fourth quarter.
Facebook attributed the drop to its product changes and noted it doesn’t expect the trend to continue.
Facebook said this month that Facebook users will see more posts from family and friends and fewer from businesses and publishers. Facebook is prioritizing news articles that it determines are trustworthy, informative and local, with the help of users.
The tech firm, which has been under pressure to do more to combat misinformation and offensive posts, has been grappling with criticism that social media is tearing people apart rather than bringing them closer together.
“2017 was also a hard year. The world feels anxious and divided and that’s played out on Facebook,” Zuckerberg said.
The company has even admitted that social media can be bad for users if they’re merely just consuming information rather than interacting with their friends and family members online.
Some analysts said they don’t think the company’s News Feed changes will draw advertisers away from the platform.
“It still has massive reach. It still has extraordinary targeting,” said Debra Aho Williamson, an analyst for eMarketer.
In 2018, Facebook will capture about 18 percent of the $266.04 billion global digital ad market, trailing behind Google, according to a forecast from eMarketer.
But with the decrease in hours spent on the site and the drop in daily active users in the United States and Canada, advertisers could see prices for the ads rise, Williamson said.
Overall, though, Williamson expects the changes to News Feed will be good for Facebook’s business.
“(Marketers) don’t want to be advertising in an atmosphere where people are feeling unhappy, frustrated or irritated,” she said. “A lot of what Facebook is doing now is trying to curb some of those attitudes.”
