Facebook Reassures News Feed Overhaul Will Not Hurt Profitability

Facebook’s recent attempts at streamlining user experience by increasing interactiveness and pushing back branded content prompted the company to reassure its investors that their digital ad business would still remain profitable. The news came right after Facebook experienced a dip in usage on the social media network.

According to company executives, Facebook’s quarterly revenue surged 47 percent from a year earlier. They also claim that there are still numerous opportunities to make money despite low user traffic on the platform.

In its earnings report, Facebook claims that their user traffic had fallen by about 50 million hours a day. Company shares soon took a 4 percent dip in after-hours trading.

However, Facebook executives remained optimistic saying that the changes will be healthy for the business in the long run and that the losses won’t tilt the balance In the short term.

“I want to be clear: The most important driver of our business has never been time spent by itself: It’s the quality of the conversations and connections,” Facebook CEO, Mark Zuckerberg said on Wednesday.

The optimistic estimates eventually caused shares to recover, which were reported at 1.4 percent at $189.50 in late after-hours trading.

Analysts were skeptical that the company would rebound after the social network announced its making changes to its products to deter foreign influence campaigns. A notable example would be Russia’s attempts at flooding the social platform with fake news and propaganda in the hopes of spreading sensationalism.

Chief Operating Officer, Sheryl Sandberg, said that the recent updates to reduce disinformation on Facebook would allow for more monetization opportunities.

According to the company, the 50 million hour dip in traffic was due to their crackdown on viral videos, something which Facebook tackled even before they announced the News Feed changes.

Facebook’s 1.40 billion daily active users were 14 percent higher than the previous year, however, it was below analyst’s expectations of 1.41 billion for the fourth quarter, according to financial data and analytics firm FactSet.

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