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The company headed by Mark Zuckerberg is going through difficult days after publishing an annual report detailing that the number of active users of the network decreased for the first time in 18 years. That led to a drop in the stock market of more than 20%, which means around 200,000 million dollars. The reasons lie in the migration of consumers to rival services, the withdrawal of sponsors and an image that investors are beginning to see out of the corner of their eyes.
This Thursday, February 3, a reality that is slowly being woven took shape in economic matters: the gradual fall of Meta, the parent company of important social networks such as Facebook, Instagram and WhatsApp. This happens after the shares of the colossus built by Mark Zuckerberg fell more than 20%, an approximate value of 200,000 million dollars in market value, thus being the largest collapse on Wall Street.
In this same week, the annual report was also published where the first loss of users of the company in its 18 years of existence was graphed. Meta Networks recognized that in the last quarter of 2021 the number of active users decreased to 1.929 million, one less than in the second.
The explanation of the executive president fell on the migration of younger users to rival companies such as YouTube or TikTok, the social network that is all the rage among consumers who are taking their first steps on social networks and that confirms an open secret: Facebook is no longer popular among younger people, who prefer to rest in other spaces. “We believe that competitive services are negatively impacting growth, particularly with younger audiences,” said Chief Financial Officer Dave Wehner.
Meta’s biggest problems in the real world:
– Apple/regulatory ad nuking its tracking and rev growth (going to take years to rebuild)
– Young people using TikTok, iMessage etc instead. Will Reels work and make $? TBD.
– Overall user growth looks tapped out— Alex Heath (@alexeheath) February 2, 2022
Another of the reasons expressed by Zuckerberg in the stagnation is that advertisers are cutting costs. The world’s second-largest digital advertising platform – behind only Google – has been hit by privacy changes to Apple’s operating system, making it harder for brands to target and measure ads on Facebook and Instagram. The situation of Meta does not look positive for 2022 despite having published a profit increase of 35% over the past year.
The abrupt fall of Meta also caused a knock-on effect that included other companies in the technology sector such as Twitter, Pinterest and Snap (creator of Snapchat), who also saw the value of their shares decrease.
“I am proud of the progress we made last year in many important growth areas such as commerce and virtual reality. We will continue to invest in these priorities in 2022 as we work to build the metaverse,” said the CEO when he presented the accounts.
The ‘Metaverse’, Zuckerberg’s dream that conspires against the company’s growth
Last October, in the midst of scandals over the lack of protection and investment that Facebook gave to the privacy of its users and when they were accused of having the sole interest in pocketing money, Zuckerberg came out of the noise by announcing the company’s name change, which was renamed ‘Meta’.
The justifications were in the new approach they planned to give to the company’s resources and management, which set as its objective to focus on the creation of a Metaverse, a digital universe that would transform the online experiences of consumers.
Facebook’s steady growth slowed to a halt and the sudden change in direction – with the switch to ‘Meta’ included – cast doubt and fear on investors, who see great risk in Zuckerberg’s current vision, given that the ‘Metaverse’ It is not yet a reality, but rather an investment of billions of dollars in the pursuit of the dream of building one.
With EFE and AP