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Facebook's U.S. user count declines as it prioritizes well-being

Facebook's U.S. user count declines as it prioritizes well-being
From TechCrunch - January 31, 2018

Facebook is putting its short-term money where its mouth is, reducing the presence of viral videos in an effort to boost well-being of users of its site. In Facebooks Q4 2017 earnings reporttoday CEO Mark Zuckerberg announced that Already last quarter, we made changes to show fewer viral videos to make sure peoples time is well spent. In total, we made changes that reduced time spent onFacebookby roughly 50 million hours every day.

Thats a reduction of roughly 2.14 minutes per day per user, given that Facebook has 1.4 billion users now. Zuckerberg later said thats a reduction of total time spent on Facebook by 5 percent.

This showed up as a reduction from 185 million to 184 million daily active users in the US & Canada region. Thats the first time Facebooks ever reported a user count decline in any market, and its in the one where it earns the most from ads. Facebook earned an average revenue per user of $26.76 in the region compared to a global average of $6.18.

What happened? The viral video changes and other prioritization of well-being over time spent contributed to a reduction of 700,000 daily active users in the U.S. and Canada region. Facebooks CFO David Wehner says he believes this is a one-time decline and not a trend. That could depend on how many time-reducing changes Facebook is willing to make, however.

Heres the key quote from Wehner:

As Mark mentioned, certain product quality changes impacted our DAU growth. In the US & Canada, these changes contributed to a DAU decline of 700,000 compared to Q3. We dont see this as an ongoing trend, but we do anticipate that DAU in this region may fluctuate given the relatively high penetration level.

Even if Facebook hadnt lost the 700,000 daily users in the U.S. and Canada, the company would still have had the slowest quarter-over-quarter percentage daily user growth ever, at 2.24 percent. The 2.18 percent growth it did experience is much lower than its previous worst quarters, Q4 2015 and Q4 2016, when it had 3 percent growth.

Its the slower global DAU growth, not the changes-related decline in the US & Canada that should give investors and social marketers pause.

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