Social Media

Facebook Posts Record Sales of $12.9B in Q4

While changes to Facebook's news feed have reduced usage of the network, higher ad prices offset any loss in revenue.
Matthew HellerFebruary 1, 2018

Facebook reported a record sales quarter and an 11th straight quarterly revenue beat even though users spent about 50 million hours per day less on the social network.

The reduced usage, CEO Mark Zuckerberg said, reflected changes to Facebook’s news feed, such as reducing the volume of viral videos, that are intended to encourage “meaningful connections between people.”

Earlier this month, Facebook announced that it would be prioritizing posts from friends and family over content from brands and publishers, and that it expected user engagement to fall.

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In the fourth quarter, Facebook’s daily user count, which analysts consider a crucial metric for the company’s long-term health, fell short of expectations, totaling 1.4 billion, compared to estimates of 1.41 billion.

But Facebook’s revenue growth was still strong, rising 47% to $12.97 billion and topping the $12.55 billion expected on average among analysts polled by Yahoo Finance.

The company noted that the price of its ads has been increasing recently, offsetting any loss in revenue from users spending less time on the site. Advertising revenue grew 48% from a year ago, with 89% of that revenue coming from mobile users.

Facebook’s global ad revenue is expected to total $53.84 billion this year, according to analysts’ estimates, making the network the largest ad seller after Google.

Facebook has been hit by controversy over security and safety issues, ranging from election meddling to violent live videos. The controversy “appears to have slowed user growth,” Forbes said, noting that total monthly active users grew 14% year-over-year in the fourth quarter to 2.13 billion people, down from a 16% year-over-year gain in the previous quarter.

“For the first time ever, the number of people using Facebook daily in the U.S. and Canada declined in the fourth quarter by 700,000 people,” Forbes added.

But Facebook is sticking to its content strategy. “ Our focus in 2018 is making sure Facebook isn’t just fun, but also good for people’s well-being and for society,” Zuckerberg said on his Facebook page. “We’re doing this by encouraging meaningful connections between people rather than passive consumption of content.”