Facebook User Growth Slows After Questions on Societal Impact

• January 31 2018
• Sarah Frier

Facebook Inc. said time spent on its social network is already falling as the company reacts to a year of questions about its impact on society.

Facebook Inc. said time spent on its social network is already falling as the company reacts to a year of questions about its impact on society.

Facebook said it had 1.4 billion daily active users in the quarter, slightly missing a 1.41 billion average estimate from three analysts surveyed by Bloomberg. Fourth-quarter revenue rose to $12.97 billion, beating the $12.6 billion average analysts’ estimate and demonstrating dominance in mobile advertising.

Facebook’s year was marred by challenges that led Chief Executive Officer Mark Zuckerberg to rethink the company’s main product, the news feed, and warn the changes could reduce time spent and engagement on the social network. Zuckerberg said the company will focus on "time well spent" and "meaningful interactions" for users -- terms Facebook hasn’t said how it will define or measure.

Zuckerberg said on Wednesday that those changes have already reduced time spent on Facebook by roughly 50 million hours a day.

“They’ve warned about a decline in one of the basic fundamental financial drivers,” said Mark Mahaney, an analyst at RBC Capital Markets. “That’s going to probably serve as an overhang on the stock.”

Facebook fell as much as 4.8 percent to $177.89 in late trading, after closing in New York at $186.89.