Revenue decline for the first time in Meta history
“We need to do more with fewer resources”Meta chief Mark Zuckerberg said on Wednesday (July 28th) after the social media giant saw its quarterly revenue decline for the first time in its history.
Amid competition from other platforms like TikTok and cuts to advertiser budgets due to poor economic conditions, Meta (Facebook, Instagram) revenue fell 1% year-over-year to $28.8 billion in Q2.
“It shows how quickly the group’s business has deteriorated.” Insider Intelligence analyst Debra Aho Williamson reacted. As for the net profit, it decreased by 36% to 6.7 billion. “The situation looks worse than three months ago” Mark Zuckerberg admitted during a conference call with analysts.
Loss of 2 million monthly users
In particular, he plans to reduce the speed of investments “Reduction of staff growth for next year”. Meta has approximately 84,000 employees worldwide, up 32% from a year ago. On Wall Street, the company’s shares fell more than 4% in after-hours trading.
On the audience side, although Facebook increased the number of daily active users to 1.97 billion, it lost 2 million monthly users. In total, as of June 30, 3.65 billion people worldwide use at least one of the group’s four networks and messengers – Facebook, Instagram, WhatsApp and Messenger – every month.
Since the beginning of the year, when the group announced that it was losing users on its first social network, Facebook, Meta has been followed like burning milk by the market.
Kim Kardashian Review
“I’ve been involved with Meta for years and I’ve never been more worried about the future of the company” Debra Aho Williamson noted. The world’s second largest digital advertiser derives its strength from its ability to precisely target hundreds of millions of users in the environment where they hang out, socialize or have fun on a daily basis.
“But Meta is losing traction with its huge audience” the expert noted. “Its Facebook user base in the US is growing strongly, and while Instagram is helping to propel the ship forward, we’re starting to see a slowdown with teenagers and young adults.” spoke in detail.
The photos and videos app was stunned when celebrities Kim Kardashian and Kylie Jenner called it out this week. “Being Instagrammed Again” and for “Don’t try to be TikTok”, a message widely welcomed and passed on by users. Meta, like Google on YouTube, has actually copied from TikTok the format of short and attractive videos published by creators and recommended to users thanks to a very powerful algorithm.
Apple is giving Snapchat a hard time
Mark Zuckerberg confirmed this direction. According to him, currently, about 15% of the content seen by Facebook and Instagram users comes from algorithm recommendations. “By the end of the year, these numbers should at least double” noted.
The metaverse on hiatus
These challenges hinder efforts to build Meta “metaverse”, a parallel universe accessible in augmented and virtual reality (AR and VR) and billed as the future of the Internet. They are “Forced to refocus on fundamentals”, noted Debra Aho Williamson. On Wednesday, the US competition authority (FTC) launched legal action against Meta to block its acquisition of Inlimited and its VR exercise app Supernatural.
FTC accuses American group “taking market shares instead of earning them on merit”Like when we got Instagram and WhatsApp messaging in the 2010s.