Maybe Facebook is fallible after all.
In the wake of controversy stemming from Russian government-funded provocateurs using its platform to spread fake election ads, Facebook has been making all kinds of noise aimed at assuring nervous regulators that it won’t be used to muck with this fall’s U.S. elections or to be a vector for the kind of fake news that undermines people’s faith in institutions. And it warned a quarter ago that its efforts to clean up its act would hurt profitability.
Mark Zuckerberg’s company is still a financial behemoth–bringing in $12.97 billion in revenue in the fourth quarter, up 48% year-over-year–according to its earnings report today. But its earnings per share of $1.44 fell well below of analysts’ estimates of $1.95. That, plus the company’s admission that changes it made to its services resulted in users spending 50 million less hours on the platform every day spooked Wall Street.
Facebook shares were down more than 4% in after-hours trading.
At the end of the quarter, Facebook said it now has 2.13 billion monthly active users and 1.4 billion daily users, both up 14% from a year ago.
“2017 was a strong year for Facebook, but it was also a hard one,” Zuckerberg wrote in the earnings release. “In 2018, we’re focused on making sure Facebook isn’t just fun to use, but also good for people’s well-being and for society. We’re doing this by encouraging meaningful connections between people rather than passive consumption of content. Already last quarter, we made changes to show fewer viral videos to make sure people’s time is well spent. In total, we made changes that reduced time spent on Facebook by roughly 50 million hours every day. By focusing on meaningful connections, our community and business will be stronger over the long term.”
Update: Facebook’s stock reversed course and is now up 1.9% in after-hours trading.