How’s Facebook doing after making changes to its news feed?
BUSINESS for the social media giant is as safe as ever, despite its recent changes to the news feed algorithm, the platform’s primary moneymaker.
The company announced in a blogpost last month that users should expect to see a feed that prioritizes “meaningful social interactions” from family and friends over “public content”, such as that from businesses and publications.
But despite the update, which was not welcomed by everyone, the company has reported another record quarter of revenue, even though people are spending less time on the social network.
It was reported that the fourth-quarter revenue rose to US$12.97 billion, beating the US$12.6 billion average estimated by analysts.
Facebook co-founder Mark Zuckerberg said the recent changes to the news feed has led to time spent on the site to decrease by 50 million hours per day. Despite this, Facebook’s chief operating officer Sheryl Sandberg has maintained that increasing user engagement with friends’ post has the potential to lead to further financial opportunities for the platform.
“In total, we made changes that reduced time spent on Facebook by roughly 50 million hours every day,” Zuckerberg said during an earnings call.
“Helping people connect is more important than maximizing the time they spend on Facebook. We can make sure the service is good for people’s well-being and for society overall.”
Facebook reported 1.4 billion daily active users in the fourth quarter, slightly missing the 1.41 billion average estimate from analysts. It was also reported that for the first time ever, there was a decline in daily active users (DAU) in the US and Canada. The amount of DAU declined from 185 million in the third quarter to 184 million in the fourth.
This is perhaps a troubling data point if you’re a Facebook investor. Though it’s a very small decline in a market that Facebook dominates, it is also the social media giant’s most valuable market.
The reason behind the decline is not clear, but it has been a tough time for Facebook in the US. Last year’s announcement that Facebook had revealed a campaign by Russia to spread political discord around the 2016 presidential election caused major controversy after reaching an estimated 150 million US users on Facebook and Instagram. These operations by Russia were made easier by Facebook’s system that reward attention-grabbing content.
But now the company is aiming to create a news feed that emphasizes only news and advertising from trustworthy sources, local providers, and authentic accounts.
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