Growth slows during Facebook’s ‘critical year,’ still reaches 2.5 billion

In the last three months, Facebook’s usually steep user growth didn’t change at all in the U.S. and fell in Europe following new data privacy laws. But during a second-quarter earnings report on Wednesday, July 25,  the social media giant shared a new number — there are 2.5 billion people using a Facebook-owned app, which also includes Instagram, WhatsApp, and Messenger, each month. The metric doesn’t double count users on multiple apps, such as people that are on both Facebook and Instagram.

The network shared the statistic for the first time this week during a report that posted slower revenue growth than anticipated while the company’s costs continue to jump. This year, the company has faced its largest privacy scandal yet while simultaneously working to make sure time on Facebook is “time well spent” and buckling down to combat abuse. Facebook expected that those changes would impact user counts and revenue, and true to the company’s predictions, both slowed during the second quarter of 2018.

Facebook’s newest statistic feels even more impressive considering 3 billion of the 4 billion world internet users are on social media. That means the company has the attention of more than 80 percent of social media users worldwide.

Facebook users now total 1.47 billion — that is still a growth over 2017, but the 11 percent growth is the slowest user growth that the network has seen since 2011. That’s also lower than last quarter’s growth after the Cambridge Analytica prompted a #deletefacebook hashtag. Facebook says the growth was driven by users in India, Indonesia, and the Philippines. Growth in the U.S. and Canada remained flat at about 185 million users. After the new General Data Protection Regulation privacy laws went into effect earlier this year, the user count in Europe fell by a million monthly active users. Despite those changes, Facebook says that a majority of users opted to allow the network to continue ad targeting to see more relevant ads at the cost of sharing data.

While Facebook predicted a slowdown when CEO Mark Zuckerberg called for the platform to make time spent on Facebook time well spent, Wall Street was more surprised by the results, with the company falling short of expectations and stock dropping by 20 percent as a result. Revenue decelerated by seven percent and the company predicts a similar “high single digit” rate throughout the remainder of 2018. Ad revenue, however, grew by 42 percent over 2017, with mobile ads now taking up 91 percent of the overall ad revenue.

At the same time, the company’s costs have increased by about 50 percent, with staff growing by 47 percent. That investment is largely for security as Facebook expands review staff. The network says that despite the investment in security, the network doesn’t plan on slowing the investment into developing new features.

The latest numbers may be bad news for investors, but Zuckerberg shared several changes implemented over the last few months designed both to curb abuse and to create less passive content consumption. The platform’s artificial intelligence for detecting graphic violence, for example, now catches 90 percent of the violence removed from the network. The network now has two new tools for ad transparency and has stepped up the fight against fake news by pushing known misinformation further down in the feed.