Facebook tweaks news feed to prioritize local news

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Though I was never a fan of Zuckerberg's hoodies from a few years back - you're a CEO, for heaven's sake! - he's stuck to his guns every step of the way, and Facebook shareholders are better off because of it.

Facebook, which has more than 2 billion users worldwide, said it's prioritizing trustworthy, informative and local news. Analysts expressed concern that Facebook's strategy shift could be an indication that user satisfaction is slipping, raising uncertainty about the impact on ad revenue, which accounts for about 98% of total sales. That amounted to the slowest user growth on record. However, its US daily active users declined from 185 million to 184 million on a quarter-to-quarter basis - the first time the company has seen such a decline. Zuckerberg said that "we made changes" in order for that time decrease to happen, and added that "focusing on meaningful connections, our community and business will be stronger over the long term".

"The News Feed overhaul and any near-term engagement issues on the platform is ultimately the "right medicine at the right time" as we believe this strategy will drive higher advertising pricing/monetization trends in the long-term for Facebook and was a move Zuckerberg & Co. needed to make", Daniel Ives, chief strategy officer and head of technology research at GBH Insights, wrote in a research note. "That's going to probably serve as an overhang on the stock".

Zuckerberg said: "Already last quarter, we made changes to show fewer viral videos to make sure people's time is well spent".

"None of that will hurt Facebook's revenues", said Frier.

The company on Wednesday reported that it grew its revenue by 47 percent to almost $13 billion during the fourth quarter.

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Diluted earnings per share were $1.44, up from $1.21 a year ago. Without the adjustment, Facebook would have earned $2.21, topping consensus of $1.94.

If you're reading this on the web, chances are you ended up at this article because of Facebook and would like to keep seeing similar stories on the site.

Facebook's response to Russia's spreading fake news on its site has spiralled into a full review of the social network's role in society.

Facebook had warned earlier this month that tweaks to its news feed feature would result in a hit to user engagement and it has also been affected by changes to the way it shows videos. In 2016, ad revenue for the newspaper industry, was about $18 billion, a decrease of 10 percent compared to the previous year, according to the center's annual report about the state of the news media.

On Jan. 12, Facebook announced upcoming changes to its News Feed section.