Ali Mogharabi: Facebook's fourth-quarter results easily beat expectations as the daily average user count grew sequentially in the largest ad spending markets, U.S. and Europe, even though the firm remains in the midst of addressing data security and privacy issues. In our view, Facebook's network effect moat source remains in tact as demonstrated by further improvement in user monetization during the quarter. We remain convinced that further growth in Instagram, IGTV, and stories users will continue to attract advertisers to Facebook's platform.
Facebook's total ad revenue was up 30% year over year driven by strong user engagement and increases in both demand for and supply of Facebook's ad inventory. Overall MAUs and DAUs experience strong growth. And we were impressed with DAUs return to sequential and year over year growth in U.S. and Europe. Monetization of users continued to improve, especially within the highest ad spending markets. We expect continuing growth in ARPU during the next five years, although at a slower rate.
Overall, we remain confident that with a strong network effect moat source, which has resulted in more than 2.3 billion users, Facebook will continue to attract advertisers to its platform. We are pleased with the company's further investments in product integration and data security, along with the introduction of new social network products and features, all of which we think will help Facebook maintain and further monetize its users. We upped our fair value estimate of this wide-moat name to $190 per share from $186. In our view, Facebook shares remain undervalued.