Facebook announced Monday that it’s going to put more local news in users’ news feeds as part of an ongoing campaign to make users “happier.”
01 February, 2018, 01:46
The company recorded $12.97 billion in revenue and $2.21 earnings per share over 2017. He also cited his experience traveling across the country previous year, when, he said, many people told him that, "if we could turn down the temperature on the more divisive issues and instead focus on concrete local issues, then we'd all make more progress together".
The company cast the changes as part of a refocus on "community" - prioritizing social interactions and relationships, even if it means people spend less time on the platform. In a note to investors earlier this month, Laura Martin, an analyst at Needham & Company, said that Facebook's shift towards more content from friends may keep potential regulations aimed at the company from gaining momentum.
Excluding a tax provision, the company earned US$2.21 per share, topping analysts' estimates of US$1.95, according to Thomson Reuters I/B/E/S.
The changes come as the online giant seeks to address charges that it has failed - along with Google and Twitter - to prevent the spread of false news, especially ahead of the 2016 United States presidential election.
The News Feed changes came too recently to affect results for the quarter ended December 31.
Facebook has been revamping its News Feed to show more posts from family and friends and fewer posts from businesses, brands and media.
Also sounding alarm bells, Facebook experienced its first-ever decline in daily active US and Canadian users to 184 million from 185 million in the prior quarter.
Facebook, founded in a college dormitory in 2004, has become one of the world's most valuable corporations by selling internet ads that it puts in front of people on Facebook and on its Instagram unit.
Facebook founder Mark Zuckerberg said it had been a "hard" year for the social media giant despite a surge in annual profits as he revealed the negative impact of recent changes.
Mr Zuckerberg's (pretty convincing) argument is that by not fixing the News Feed, the long-term health of the company could be in jeopardy - not because of Russian propaganda or fake news, but because it just won't be fun or useful to use.
Meanwhile, U.S. newspapers continue to face declining circulation and ad revenue.
But as the company tries to encourage users to interact more with their family and friends, Zuckerberg said he thinks the changes are good for the business in the long term.
Facebook is making changes to how it ranks posts in a user's News Feed, a move that has also raised questions about how this will impact the tech firm's growing ad business.
Full-year profits rose 56% to $15.9bn and revenues climbed 47% to $40.7bn while fourth quarter revenues and underlying earnings beat analysts' expectations.
Russia's operation - in the USA and ahead of other elections around the world - was made easier by incentives on Facebook that reward attention-grabbing content. Zuckerberg is looking to tweak the news feed to emphasize news and advertising from trustworthy sources, local providers and authentic accounts. Shares fell about 4% after the market closed Wednesday. However, as executives on the earnings conference call hammered home their belief that site changes won't hurt advertising revenue, shares recovered to almost a 2 percent uptick, close to the all-time high of $190.66.