FACEBOOK SABBATICAL

Americans are logging off Facebook

Lurking in Facebook’s stellar quarterly earnings report Thursday were some troubling numbers: The company added fewer daily active users than analysts expected, and CEO Mark Zuckerberg said that as a result of the company’s moves, the time people spent on the platform dropped by 50 million hours daily.

More worrying, in Facebook’s most lucrative market, the US and Canada, the number of people who log on to Facebook every day fell for the first time ever, dropping by 700, 000 to about 184 million. User growth, for users who log on daily and monthly, has been slowing for several years, but the company had not recorded an actual decline.

Moreover, the drop came before the company’s announcement of its latest News Feed changes, which are expected to reduce engagement on the platform, perhaps causing a further drop in users. Over the past year, Facebook has been the center of controversy over fake news, Russian ads aimed to disrupt the 2016 US elections, and its overall policies on what content people can post on the platform.

 People who log on to Facebook every day fell for the first time in the most lucrative market  

Asked on the earnings call about the falling number of daily users in the US and Canada, CFO David Wehner said he didn’t anticipate that this would be a “continuing trend,” but that because Facebook’s penetration in the region is so strong, “we do think that there will be some fluctuation there.” He attributed the drop to “certain product quality changes.”

In Europe, another important market for the company, user growth is also lackluster, and COO Sheryl Sandberg said that daily active users might fall as a result of the EU’s sweeping data privacy overhaul, which is to take effect in May.

User growth in other areas of the world—where revenue per user is a fraction of that in North America—is relatively robust:

However, the US and Canada continue to be the company’s biggest money-making machine:

Sandberg said she wasn’t concerned about the company’s business in relation to the News Feed change. “When people spend time viewing more posts, because they’re interacting with family and friends, and they’re not involved in longer posts, we have actually more monetization opportunities,” she said.

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