Facebook kills the video star: Zuckerberg soothes investors amid changes

1 Feb 2018

Facebook CEO Mark Zuckerberg. Image: Frederic Legrand - COMEO/Shutterstock

Viral video usage falls and Facebook loses 1m users in North America. Relax, it’s all part of the plan, says Zuckerberg.

On paper, a 47pc jump in revenue to almost $13bn should be a reason to celebrate but, reading between the lines, doing the right thing is what’s keeping Facebook CEO Mark Zuckerberg awake at night.

Last night (31 January), Facebook reported that profits rose to $4.3bn.

‘We made changes to show fewer viral videos to make sure people’s time is well spent’

Facebook said it had taken a $2.3bn charge to cover the cost of repatriation of foreign earnings under the new tax code introduced in the US by the Trump administration.

A key cause for concern in Facebook’s latest quarterly earnings is the revelation that time spent by users on the social network has fallen by about 50m hours per day.

Just as worrying is the fall for the first time ever in the number of people in the US and Canada who use Facebook on a daily basis, dropping from 185m a year ago to 184m.

Change is hard, but necessary

Zuckerberg has dismissed the declines as “fluctuations” and said that showing fewer viral videos contributed to the fall in the time people spent on Facebook.

A key reason for this could be Facebook’s attempts to limit the spread of fake news on the social network, preventing tampering by Russian agents. It is aiming to pivot in the direction of being a trusted source of information by surfacing content that is more meaningful as well as relevant local news. The social network has also moved to block misleading cryptocurrency ads.

Either way, Facebook is still the biggest social network on the planet and, with almost $13bn in revenues and a staff of 21,105 people, it is not going to disappear any time soon.

For the fourth quarter, it had 1.4bn daily active users, up 14pc on the year. Globally, 2.1bn people use the social network every month. That’s a lot of people.

Mobile advertising represented 89pc of ad revenue, up from 85pc a year ago.

“2017 was a strong year for Facebook, but it was also a hard one,” said Zuckerberg.

“In 2018, we’re focused on making sure Facebook isn’t just fun to use, but also good for people’s wellbeing 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 50m hours every day.

“By focusing on meaningful connections, our community and business will be stronger over the long term.”

Facebook CEO Mark Zuckerberg. Image: Frederic Legrand – COMEO/Shutterstock

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years