On Wednesday, July 27, Meta once again witnessed one of those moments every tech company founder dreads: For the first time since its inception in 2004, the company founded by Mark Zuckerberg saw its revenue decline. Revenue at Meta, parent company of Facebook, Instagram and WhatsApp, fell 1% to $28.8 billion in the second quarter compared to the same period in 2021. Net income fell 36% to $6.7 billion.
In the previous quarter, the world leader in social networks (2.88 billion daily users) had already announced the first decline in the number of Internet users connecting to Facebook every day. Meta faces a severe crisis that casts doubt on its ability to return to double-digit growth. “We are optimistic in the long term”tried to reassure Mark Zuckerberg by attributing the main problems to the macroeconomic context, “Worse than three months ago”.
In fact, the war in Ukraine has forced the company to halt operations in Russia, inflation and recession fears are weighing on ad spend, and the strength of the dollar is reducing operations outside the United States (excluding this exchange rate effect, revenue). would have grown by 3%, assured Meta). But the group is also facing fundamental problems. The first is competition from TikTok, the Chinese social network which, according to social media specialist Hootsuite, surpassed one billion users at the end of 2021 with growth of 45%.
Very short videos
The main threat of TikTok lies in its format of very short videos of a few seconds and its mechanics: offering the Internet user the content that is considered the most entertaining, from accounts that he does not necessarily follow. Meta chose the strategy of copying and launched its own format of short videos, “Reels”. To push it, he began showing it more and more frequently in users’ feeds on Instagram, where it became the standard video format.
On Facebook, a UI change should highlight this suggested content, while the photos and videos of friends and accounts that are followed will be accessible in a separate tab. Problem: These changes cause misunderstandings and protests from some users. “Stop trying to be TikTok, I just want to see pics of my friends”, posted a post on Instagram on Monday, July 25th, shared notably by network star Kylie Jenner (360 million subscribers) and her sister Kim Kardashian (326 million).
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