Facebook Usage Dips

Facebook Inc offered reassurances to investors on Wednesday that its digital ad business would remain highly profitable, despite a dip in usage on the social media network and an overhaul of its flagship News Feed.

Reuters reports the company said in an earnings report that quarterly revenue jumped 47 percent from a year earlier, and executives said on a conference call that they saw more chances to make money even if people spend less time on Facebook.

Mark Zuckerberg

Analysts had wondered about the resilience of the world’s largest social media network, which is making changes to its products to deter foreign influence campaigns like ones that it says Russia has carried out and to stem the spread of sensationalism.

Facebook added to jitters after the bell on Wednesday when, in its earnings report, it said that at the end of last year time spent by users had fallen by about 50 million hours a day. Shares fell more than 4 percent in after-hours trading.

Shortly afterward, though, Facebook executives expressed optimism on the call with analysts, saying the changes they were making in response to criticism would be healthy for the business in the long term and might not even hurt much in the short term.

Sheryl Sandberg

“I want to be clear: The most important driver of our business has never been time spent by itself. It’s the quality of the conversations and connections,” Chief Executive Mark Zuckerberg said on the call.
The upbeat forecast led to a rebound in shares, which in late after-hours trading were up 1.4 percent at $189.50.

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 Chief Financial Officer David Wehner said the average price per ad increased 43 percent in quarter.

Facebook’s 1.40 billion daily active users was up 14 percent from a year earlier, but below analysts’ estimate of 1.41 billion for the fourth quarter, according to financial data and analytics firm FactSet.