Facebook Loses Ground to Google With Users Spending More Time on YouTube

  • Social media company relies on user engagement to sell ads
  • Analyts watch for more slippage amid Cambridge Analytica furor
People are spending more time on Google products like YouTube than on Facebook #tictocnews

Facebook Inc. lost ground to Google in January as users spent more time on YouTube and other Alphabet Inc. properties, according to a report.

Brian Wieser, a Pivotal Research analyst who reviewed Nielsen digital consumption data, said Google properties, including YouTube and Waze, combined to account for 27.4 percent of all time spent on digital media -- up 3 percentage points from the previous year. By contrast, Facebook’s share of time spent fell about 2 points to 16.3 percent over the same period.

Facebook depends on people coming back frequently so it can collect data and use it to target ads at them. The company said in the fourth quarter that people were spending less time on the site after Facebook began shifting users’ news feeds back toward posts from friends and family and away from businesses and media outlets. But if the trend continues, investors could take it as a sign that users are losing interest in Facebook.

Nielsen published its Digital Content Ratings on Tuesday. YouTube accounts for half of all Google activity and continues to draw consumption well in excess of 20 percent year-over-year every month, Weiser said. Other Google properties expanded by 33 percent.

Facebook’s main site lost 5 percent in time spent, despite a 4 percent increase in the number of users. That amounts to an 8 percent decline per person, Weiser said. Instagram, a Facebook property, did much better with a 7 percent increase in time per user.

Analysts are closely watching the social network’s user engagement amid revelations last month that the private data of millions of people was scooped up by the political consulting firm Cambridge Analytica. The resulting furor sparked a #deleteFacebook movement and forced Chief Executive Officer Mark Zuckerberg to testify to Congress.

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Facebook shares rose 1 percent to $166.73 at 9:35 a.m. in New York, after closing up 4.5 percent Tuesday.

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