This is only a 1% drop, but still historic. According to a statement from the group on Wednesday, July 27, Meta, the parent company of Facebook, Instagram and WhatsApp, saw its quarterly revenue fall for the first time. “We need to do more with fewer resources”said social media giant boss Mark Zuckerberg.
Between competition from other platforms like TikTok and advertiser budget cuts due to the poor economy, Meta’s second-quarter revenue fell 1% to $28.8 billion compared to the second quarter of 2021. Net income fell 36% back to 6.7 billion.
“The situation seems worse than three months ago”, confirmed Mark Zuckerberg during a conference call with analysts. She plans to slow down the rate of investment in particular by “Reduction of staff growth in the coming year”. Meta has nearly 84,000 employees worldwide, up 32% from a year ago.
On Wall Street, the company’s stock fell more than 4% in electronic trading after the close.
Two million fewer monthly users for Facebook
On the viewer side, Facebook increased daily active users to 1.97 billion but lost 2 million monthly users. In total, as of June 30, 3.65 billion people around the world use at least one of the group’s four networks and messengers – Facebook, Instagram, WhatsApp and Messenger – every month.
Meta has been watched by the market like milk on fire since earlier this year, when the group first announced it had lost users on its original social network, Facebook. Around one million daily active users left the platform in the last three months of 2021.
Since the beginning of February, the stock price has halved and more than $400 billion in market cap has gone up in smoke.
The second-largest digital advertiser in the world derives its strength from its ability to accurately target hundreds of millions of users in an environment where they spend time every day, connecting or having fun. “But Meta is losing control of its massive audiencefinds with Agence France-Presse (AFP) Debra Aho Williamson, analyst at Insider Intelligence. The US Facebook user base is barely growing, and while Instagram is helping move the boat forward, we’re starting to see a slowdown among teens and young adults. »
The photo and video app was teased this week when celebs Kim Kardashian and Kylie Jenner called it “Become Instagram Again” and to “Stop trying to be TikTok”, a message widely welcomed and shared by users. Meta, like Google on YouTube, has in fact copied TikTok’s format of short and engaging videos, published by creators and recommended to users thanks to a very powerful algorithm.
Mark Zuckerberg confirmed this orientation. He said that currently about 15% of the content seen by Facebook and Instagram users comes from algorithm recommendations. “These numbers should at least double by the end of the year”he specified.
Last week, Snap plummeted on disappointing financial results despite a notable 40% surge in Snapchat users. And Google on Tuesday posted its slowest year-over-year revenue growth rate since the second quarter of 2020. The two companies, like many other tech companies, will significantly slow the pace of hiring.
These difficulties hamper Meta in his efforts to build the Metaverse, a parallel universe accessible in augmented and virtual reality (AR and VR) and presented as the future of the internet.
Also on Wednesday, the US Competition Authority (FTC) filed a case against Meta to prevent the acquisition of Within Unlimited and its use for physical exercises in VR Supernatural. The FTC accuses the American group “Buy market share instead of gaining it through performance”as it reportedly did when it acquired Instagram and WhatsApp messaging in the 2010s.
also listen In Search of the Metaverse