Dominance of Mobile Ads Draws in Cash for Facebook, But More Users Logging Out

Photo by Brian Solis/Flickr

Late last night, Facebook surpassed expectations with revenues during the fourth-quarter amounting to $13bn (£9.1bn).

Analysts had pencilled in sales amounting to $12.6bn during the three months to December. Earnings per share were at $2.21 as compared with consensus projections of about $1.95.

However, shares dropped by almost five percent during after-hours trading, after Mark Zuckerberg, the CEO of Facebook, said that the tech titan had made some changes to its flagship page, the news feed, which reduced the amount of time that the users spent on the platform.

During the last quarter, the time spent by users on Facebook had dropped by around 50m hours every day.

About 2.13bn people used its service monthly as of the 31st of December, up 14 by percent from a year earlier.

Zuckerberg stated: “Already last quarter, we made changes to show fewer viral videos to make sure people’s time is well spent.”

Both the quarterly and the full-year total revenue rose by 47 percent, with the full year tally hitting $40.65bn.

Mobile ad revenue accounted for 89 percent of the total ad sales, up from the 84 percent that was recorded a year earlier.

“In 2018, we’re focused on making sure Facebook isn’t just fun to use, but also good for people’s well-being and for society. We’re doing this by encouraging meaningful connections between people rather than passive consumption of content.”

The tech giant also intends to highlight “trustworthy” news in the news feed, following allegations that false news rapidly spread on the site.

Facebook said that the tax reforms of US President Donald Trump would lower earnings per share by 77 cents for the fourth quarter and full-year.