Facebook recently posted strong Q4 and full-year results for 2017. The company’s revenues shot up 47% during the last quarter of the year ($12.97 billion) compared to Q4 2016 ($8.8 billion).
The social network has advertising revenue to thank for the boost, which made up $12.78 billion of the total. Mobile alone accounted for 89% of the increase – up 5% from Q4 2016.
However, despite the positive results, the social network also noted a drop in daily active users in the US and Canada for the first time (185 million to 184 million between Q3 and Q4 2017).
Whilst the decline in active users won’t have a big effect on its bottom line just yet, the company may begin to question what went wrong.
Facebook attributed the drop in activity to its newsfeed changes, which it claimed improved the quality of the content users are seeing.
However, part of the decline could be attributed to the company’s own subsidiaries – Instagram and WhatsApp. Indeed, Instagram is quickly becoming a successful social media platform. What started out as a photo sharing app, now looks more and more like an image-driven mini-Facebook.
Meanwhile, WhatsApp could turn into a problem for Facebook as it develops ways to monetize an otherwise ad-free messaging app. The majority of Facebook users are already using more than one additional messaging app.
The drop in users in the US wasn’t the only decline Facebook posted for the year. In addition, user time spent on Facebook fell by 5% in Q4, representing around 50 million fewer hours spent on the social media platform.
CEO Mark Zuckerberg commented:
“Let me be clear: helping people connect is more important than maximizing the time they spend on Facebook. We don’t normally share time metrics because they’re not the best way of understanding engagement. But this shows how committed we are to making sure the time you spend is valuable.”
By focusing on more meaningful social interactions, the company may be up to something. Given the fake news and advertising scandals over the last two years, the focus on more quality content and controlled user feeds, free from hate-filled, dividing or fake posts, may ultimately please the big brands and advertisers.
The social network is also actively working on greater transparency measures across its advertising tools.
At the same time, Facebook noted that it was focusing more heavily on smaller businesses in 2018 as a way to drive demand fulfillment opportunities. By pushing engagement between entrepreneurs and smaller brands with users, brand connections can be more meaningful compared to clicks.
“We have a responsibility to fully understand how our services are used, and to do everything we can to amplify the good and prevent harm. This is my personal challenge for 2018,” Zuckerberg concluded.