Jan 31 (Reuters) - After 18 months of distraction defending itself over privacy and its role as a platform for electoral manipulation, Facebook Inc is focusing squarely on products after its strong fourth-quarter results won back investors, who sent its shares up nearly 12 percent on Thursday.
The social network has been spending heavily to boost user privacy on its platform following pressure from regulators and users around the world. But it reported better-than-expected profit and revenue on Wednesday, attributing the gains to higher ad sales and product improvements.
"We've put most of our energy into security over the past 18 months, so that building new experiences wasn't the priority over that period," Mark Zuckerberg, the 34-year old billionaire and chief executive officer of Facebook, told analysts on a post-earnings call.
"So this year, I think we're going to deliver several of these new experiences," Zuckerberg said.
Shares of the social media network rose nearly 12 percent to $168 in trading before the bell on Thursday, with at least 17 analysts raising their price targets on the stock.
Analysts said Facebook is taking cue from the early success of its popular Stories feature and will invest significantly in getting more advertisers on board to the format, which has further upside in terms of pricing.
The Stories format is used by about 2 million advertisers out of Facebook's total 7 million active advertisers, and the company said it would add more features to make it easier for advertisers to adapt their campaigns.
Facebook has intentionally kept ad unit pricing for Stories 20 percent to 50 percent lower than News Feed as it works to improve performance and could bring a double-barreled benefit to ad revenue growth if it can improve ad efficacy, Morgan Stanley analysts said.
More than 2.7 billion users interact with at least one of Facebook's apps each month, up from 2.6 billion last quarter.
"The bottom line is that with more than a quarter of the world using FB every day, we think advertisers have no choice but to follow their customers," Macquarie Research analysts said. (Reporting by Munsif Vengattil and Derek Francis in Bengaluru Editing by Saumyadeb Chakrabarty)