Facebook execs were finally in the giving mood on Thursday. But it's unclear if investors wanted to hear what they were offering.
After a year of security struggles and content controversies, Facebook (FB) executives Sheryl Sandberg and David Wehner detailed the steps that the social media giant is taking to give users a better and more meaningful experience in 2018.
Sandberg, the company's chief operating officer, and Wehner, its chief financial officer, presented at the Morgan Stanley 2018 tech conference in San Francisco on Wednesday afternoon. The company announced its fourth quarter earnings on Jan. 31, reporting record earnings but decreased time spent on the site, largely due to changes Action Alerts Plus holding Facebook made to show higher quality content to users.
Sandberg addressed what she called the "false news" that's pervaded Facebook recently, including the presence of fake accounts sharing misinformation and Russian propaganda around the 2016 United States presidential election. She reiterated that Facebook has hired thousands of people to work on security and integrity, and said that a total of 20,000 employees will be working on it by the end of 2018.
"I don't think we can or should be the arbiters of truth, but we know people want the truth," Sandberg said.
The company also chalked up declining visit length to changes the company made to its news feed algorithm that prioritize posts from friends and family over viral videos and brand content. As CEO Mark Zuckerberg noted in the fourth-quarter earnings call, these changes have resulted in visitors spending 5% less time, or roughly 50 million hours per day in aggregate, on the site.
"We're trying to make sure that Facebook is that community where you can connect meaningfully with friends and family," Wehner said.
The new algorithm has resulted in less passive consumption of video and more sustained engagement with posts through the news feed. And as the user experience becomes better and the Facebook environment improves, advertisers benefit as well, he said.
Sandberg and Wehner told attendees that the company's other services, like instant messaging apps WhatsApp and Messenger, offer plenty of opportunities for growth and monetization. For instance, businesses using Messenger can let visitors communicate with bots about specs and price quotes after clicking on an ad for a product or service. As of September 2017, Messenger had about 1.3 billion users each month, while WhatsApp had 1.5 billion users each month as of January 2018.
Sandberg also highlighted the new Facebook Watch feature, which allows users to find categorized video content in a consistent place rather than solely through the news feed or individual pages. Sandberg said that Facebook funded some of the content initially featured on the Watch tab in order to "stock the shelves," but going forward more content is being provided by partners.
"That's the business model we're going for," she said.
Facebook shares fell 1.7% to $178.32 on Wednesday. Over the last 12 months, they're up almost 32%.