Facebook will be “prioritizing meaningful social interactions over passive consumption of content” and “making sure the information you see on Facebook comes from broadly trusted and high-quality sources, in order to counter misinformation and polarization,” CEO Mark Zuckerberg said during the company’s earnings call for the quarter ended December 31, 2017 (Q4 2017).
In regards to the first, Zuckerberg said that the company has already experienced an impact with users spending about 5% less time on Facebook during the December quarter, which he said translates to “reduced time spent on Facebook by an estimated 50 million hours every day.”
While in regards to countering misinformation, Zuckerberg said:
Preventing false news, hate speech, and other abuse is another important area of focus for us. In order to protect the security and integrity of our platform, we’re investing in both people and technology. We now have around 14,000 people working across community ops, online ops, and our security efforts. That’s almost double where we were a year ago. We’ve also built new technology to detect suicidal posts that has helped first responders reach more than 100 people who needed help quickly, and we’ve built AI systems to flag suspicious behavior around elections in real time and remove terrorist content.
We’ve also made progress demoting false news in News Feed, which typically reduces an article’s traffic by 80% and destroys the economic incentives that most spammers and troll farms have to generate these false articles in the first place.
Facebook posted total revenues of $12.97 billion for the December quarter, up 48% year-on-year (YoY) from $8.63 billion in Q4 2016. Advertising revenue contributed 98.5% or $12.78 billion of total revenues, while payments and other fees contributed $193 million.
Facebook’s mobile advertising revenue stood at $11.4, an increase of 57% YoY. It represented 89.2% of its total advertising revenue for the quarter, as compared to 84% of total ad revenue in the corresponding quarter the previous year. This despite the fact that at the end of the first quarter of 2017, CFO David Wehner had said that Facebook had maxed out how many ads it can squeeze into people’s news feeds. “With regards to revenue, we continue to expect that our ad revenue growth rates will come down meaningfully over the course of 2017,” Wehner had said.
In fact, just the opposite has happened across 2017:
Q1 2017: $7.85 billion
Q2 2017: $9.16 billion
Q3 2017: $10.14 billion
Q4 2017: $12.78 billion
The only time Facebook’s ad revenues dropped since Q4 2015, was from $8.63 billion in Q4 2016 to $7.85 billion in Q1 2017.
Key operational metrics
- Facebook reported daily active users (DAUs) of 1.4 billion for December 2017, up 14.4% YoY from 1.23 billion (led by growth in markets like India, Indonesia and Brazil). Of these, 499 million DAUs were in the Asia-Pacific region, 277 million in Europe, 184 million in US & Canada, and 441 million across the rest of the world.
- The number of monthly active users (MAUs) stood at 2.13 billion at the end of December 2017, up 14.5% YoY from 1.86 billion. There were 828 million MAUs in the Asia-Pacific region, 370 million in Europe, 239 million in US & Canada, and 692 million across the rest of the world.
- Facebook’s average revenue per user (ARPU) stood at $6.08 from advertising and $0.09 from payments and other fees. ARPU in US & Canada is still well above that in the other regions at $26.26 from advertising and $0.51 from payments. In Europe it is $8.71 and $0.15, in Asia-Pacific it is $2.52 and $0.01, and in rest of the world it is $1.85 and $0.01, respectively.
- Over 2 billion messages are sent between businesses and customers per month via Messenger, as of December 31, 2017.
- WhatsApp has over 1.5 billion monthly actives, and users send more than 60 billion messages every day.
- Currently, there are 2 million active advertisers on Instagram. As of November 2017, more than 25 million businesses have profiles on Instagram, up from 15 million in July 2017.
- The average price per ad increased 43% and the number of ad impressions served increased 4%, driven primarily by feed ads on Facebook and Instagram.
- Headcount was 25,105 as of December 31, 2017, an increase of 47% YoY. In Q4, Facebook added about 1,900 people.