Facebook defends drop in users, predicts rising revenue

Facebook is defending its first ever drop in usership.

The news that people are leaving the platform can spook investors and other business partners, calling into question the longevity of the platform.

Officials at Facebook contend that the decline in use is a healthy sign for the company, spinning their efforts to change the network for the better.

TechCrunch wrote:

In Facebook’s Q4 2017 earnings report today CEO Mark Zuckerberg announced that “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.”

That’s a reduction of roughly 2.14 minutes per day per user, given that Facebook has 1.4 billion users now. Zuckerberg later said that’s a reduction of total time spent on Facebook by 5 percent.

Zuckerberg sold his vision of a Facebook that is good for the “well-being” of its users in a post to his account:

Our focus in 2018 is making sure Facebook isn't just fun, 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. 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.

The company is facing scrutiny over how it tries to retain users, with some calling their practices overly aggressive.

The Independent wrote:

People who are logging into Facebook less often — but aren’t fully disconnected — are noticing more and more frequent prompts to come back, sometimes multiple times a day, via emails or text messages reminding them what they’re missing out on, according to screenshots and reports from users around the world.

[…] Even with regular users, Facebook has become thirstier for posts. The social network’s reminder boxes at the top of the news feed, which often show memories or anniversaries of friendship with close pals, have recently become real estate for more trivial milestones — like being tagged in 10 photos with someone or getting 100 heart reactions.

Others point to this news and say that this trend was the motivation for all the changes that have been announced on Facebook in the last couple of months.

TNW wrote:

The drop in users could also help explain Facebook’s recent moves to fix its machinery – it’s promised to surface more content from your contacts instead of from brands and publishers, it’s trying to crowdsource help to identify trusted media outlets, it’s working to bring you more local news so you’re better connected to your community, it’s blocking cryptocurrency ads that may be misleading, and it says that it’s showing fewer viral videos, which has caused time spent on the site to drop by 50 million hours a day – all in an effort to make people’s time spent on the social network more meaningful.

Although Zuckerberg may have hoped that the changes—and his prediction that usership would drop because of them—would prepare investors for the Q4 reports, the changes come too late to explain the loss of users.

Recode writes:

In early January, Zuckerberg warned people that a decline was coming as a result of changes Facebook was making to its News Feed algorithm, a decision by Facebook to show users more posts from friends and family, and fewer posts from publishers.

But those changes came after Facebook’s Q4 was in the books. Which means they can’t be used to explain the 5 percent decline Facebook reported Wednesday.

Other Facebook officials were less forthcoming in discussing the losses.

Recode continued:

It’s still not entirely clear what caused the decline. CFO Dave Wehner attributed it to “product quality changes,” and when asked to elaborate later on the call, Wehner declined.

But Facebook still soothed concerns about the decline with investors. Wehner clarified that the decline wasn’t even a million users — 700,000 in total, he said — before adding that he “don’t see this as an ongoing trend.”

Forecasts for rising revenue were music to investors’ ears, and Facebook’s stock ended the day up by almost 2 percent.

[RELATED: Learn how to boost buzz, build brand recognition and engage employees on the hottest social media platforms.]

Reuters reported:

Chief Operating Officer Sheryl Sandberg told analysts that recent changes to reduce disinformation on Facebook could create “more monetization opportunities.”

Sandberg said she was optimistic about potential revenue from ads on “stories” on Facebook and Instagram, while [CFO Wehner] said the average price per ad increased 43 percent in quarter.

See Mark Zuckerberg’s full statement here:

On Twitter, many pointed to the size of Facebook, questioning whether the blip in user numbers was really news.

Some took the long view of Facebook’s growth:

Facebook's monthly active users:

2017: 2.13 billion
2016: 1.9 billion
2015: 1.6 billion
2014: 1.4 billion
2013: 1.2 billion
2012: 1.1 billion
2011: 845 million
2010: 608 million
2009: 360 million
2008: 140 million
2007: 50 million
2006: 12 million
2005: 5 million
2004: 1 million

— Jon Erlichman (@JonErlichman) January 31, 2018

Others proclaimed their freedom from the site:

I’m not surprised Facebook is losing users — since jumping ship I’ve not once regretted it.

— David Scott O'Reilly (@dsoreilly) February 1, 2018

What do you think of Facebook’s spin on its Q4 losses, PR Daily readers?

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