Facebook's 2017 profit up 56% despite usage decline

Facebook reported a 67% rise in net profit for 2017 on Thursday, to $15.9bn from a $10.2bn figure in 2016.

The improvement in profit came despite a drop in the social network’s daily usage and an unexpected $2.3bn tax payment under the new US tax regime.

Its revenues were 47% higher over the previous year at $40bn, with earnings per share up one dollar in the final quarter at $2.20.

Chief executive Mark Zuckerberg said that, although 2017 was a “strong year” for the company, it was also a hard one.

“In 2018, we’re focused on making sure Facebook isn’t just fun to use, but also good for people’s wellbeing and for society,” he commented.

Zuckerberg recently explained that the firm had decided to show fewer viral videos and posts from companies, and instead prioritise posts from friends and family.

The change was in response to negativity surrounding the apparent addictive qualities of the social network, and reduced user time spent on the platform by around 50 million hours a day.

Facebook also received intense criticism for allowing the dissemination of ‘fake news’ during the 2016 US presidential election, and was urged to filter the posts it allows.

Despite lowering the priority of company content, advertising accounted for most of the company’s rise in revenue for 2017.

Total advertising on the Facebook app was up 49% last year, with around 89% of its ad revenue coming through the smartphone app in the last quarter.

Chief operating officer Sheryl Sandberg told analysts that the reduction of disinformation - or ‘fake news’ - on Facebook could create “more monetisation opportunities,” and that she was optimistic about the performance of advertising on Instagram and Facebook’s ‘story’ features.

Facebook was affected by Trump’s new tax system, which implemented a one-time mandatory tax on overseas profits and forced the company to part with $3.19bn.