Facebook has officially posted its results for the fourth financial quarter of 2017, and it bears both good news and bad news. The good news is that the social network beat analysts' revenue estimates for the said period, rising 47 percent to $12.97 billion from the previous year's $8.81 billion revenue in the same period.
The gains represent Facebook's 11th straight quarterly revenue beat, in large part driven by mobile ads, including those on Instagram, and the company's increasingly precise targeting tools.
Facebook Users Are Spending Less Time On Facebook
The bad news? People are using the site less and less, said CEO Mark Zuckerberg. Collectively, Facebook users spent 50 million hours less than the last quarter, amounting to a 5 percent decline in time spent on the app.
"2017 was a strong year for Facebook, but it was also a hard one," Zuckerberg said. "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."
That's hardly news for Zuckerberg, who had already anticipated the decline well before his company posted its latest results. Earlier in January, the CEO warned users that a decline was to occur because of changes that were being applied to newsfeed algorithms, which would allow users to see more posts from their friends, family, and relatives instead of being constantly bombarded by content from various publishers.
Q4 Results Precede Newsfeed Changes
There's an important point here. Such changes were implemented after Q4 results were in the books already. This means that Facebook can't use the algorithm changes to explain the 5 percent decline, as Recode points out.
So what was the reason behind the decline? According to Zuckerberg, it's the decline in the amount of viral videos saturating feeds. That's all part of Facebook's sweeping changes to ensure people are spending quality time instead of passively scrolling.
"[T]oo often today, watching video is just a passive experience. To shift that balance, I said that we were going to focus on videos that encourage meaningful social interactions. So in Q4 we updated out video recommendations and made other quality changes to reflect these values."
So people spending less time on Facebook is okay, according to Zuckerberg, and that's actually the goal even. The decrease in time spent on the site will likely persist moving forward. Of course, the main concern is Facebook's business aspect suffering because of the changes, but the CEO says he isn't worried.
"Let me be clear: Helping people connect is more important than maximizing the time they spend on Facebook," said Zuckerberg. "We think that that's going to be positive. We think it'll help make the community stronger over the long term, and we think it'll be good for the business over the long term."