Due to the number of advertisements on Facebook, younger teens had not been using the site. In the hopes of saving revenue growth, Facebook has put a stop to the amount of ads set to appear in user posts.
Facebook shares retreated after Chief Financial Officer, David Ebersman, commented on the number of ads. While the stock surged by 18% and Facebook sales topped analysts' estimates during the third-quarter, a decrease in users had occurred.
The decrease in usage was noticed in the number of younger teens during the quarter. The younger generation had been turned off by the amount of ads appearing in the newsfeed.
An analyst from Pivotal Research Group, Brian Wieser, stated, "It's a fine line. They want to manage the user experience. They don't want to overwhelm consumers' use of Facebook with advertising."
Facebook shares experienced little change in extended trading. The stocks declined by less than 1%.
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