Despite the controversy over fake news that has prompted changes to Facebook’s news feed, the social media giant posted revenue of $12.9bn for the fourth quarter and $40.6bn for 2017, both up 47%.
Although expenses were up 32% for the quarter and 34% for the year and the company was hit by a $2.3bn tax payment because of the new US tax law, net profits were up 20% to $4.3bn for the fourth quarter and up 56% to $15.9bn for the full year.
“It was a strong year for Facebook, but it was also a hard one,” said Mark Zuckerberg, Facebook’s founder and CEO.
“In 2018, we are focused on making sure Facebook isn’t just fun to use, but also good for people’s wellbeing and for society,” he added. “We are doing this by encouraging meaningful connections between people rather than passive consumption of content.”
Zuckerberg said that in the last quarter, Facebook made changes to show fewer viral videos to make sure “people’s time is well spent”. The company is attempting to increase interaction between users by prioritising posts from friends and family, while reducing the prominence of other content.
He admitted that the changes had reduced time spent on Facebook by about 50 million hours every day, but said that by “focusing on meaningful connections, our community and business will be stronger over the long term”.
Despite the changes, Facebook reported 1.4 billion daily users and 2.13 billion monthly users on average for December, both representing a 14% increase compared with December 2016.
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Analysts said the growth in profits was driven mainly by Facebook’s continued dominance of social media advertising and the growth in mobile users at the end of 2017, which was marked by criticism over censorship and concerns that Facebook was used by Russia to influence the 2016 US presidential elections.
Mobile advertising revenue represented almost 90% of advertising revenue for the fourth quarter of 2017, up from 84% of advertising revenue in the fourth quarter of 2016, the company said.
Just ahead of the financial results, top Democrat lawmakers demanded more details from Facebook and Twitter about the extent to which Russian bots were being used to push stories on their platforms, reports The Guardian.
Despite the strong financial report, which was in line with forecasts, Facebook’s share price fell by nearly 5% in after-hours trading, which analysts have ascribed to concerns that the proposed changes to Facebook will slow growth and reduce user engagement. But the share price rebounded quickly, according to the BBC.
Meanwhile, Facebook’s new policy prohibiting adverts that relate to cryptocurrencies or initial coin offerings (ICOs) from the two billion-user social network because they are “frequently associated with misleading or deceptive promotional practices” has added fuel to rumours that Facebook may make a foray into the world of digital coins, reports The Telegraph.