In one day, Meta, the company behind Facebook, Instagram and WhatsApp, gained more than 200 billion dollars (185 billion euros) in market value. The 22 percent share price increase last Friday followed the presentation of the annual figures for 2023. They were so favorable that Meta decided to buy back 50 billion dollars worth of its own shares and pay out a 50 cent dividend per share. Founder, CEO and major shareholder Mark Zuckerberg also benefits from this: based on that dividend, he can add $700 million per year to his account.
Meta is coming out of a deep valley. A year ago, the company was struggling with the after-effects of the pandemic and dismissed 11,000 people, more than 13 percent of its employees. Another big one followed later round of layoffs. These “restructurings” had an effect, according to Zuckerberg: his company is running more efficiently than during the corona crisis, when Meta's workforce doubled. Meta is currently worth more than before: more than 1,200 billion dollars. By announcing a dividend now, Zuckerberg is creating a sophisticated peak for his company, which is almost twenty years old this week.
In 2012, Meta went public, at the time still under the name Facebook. Since then, it has taken over Insta-gram and WhatsApp and has been plagued by privacy scandals, charges of abuse of power and stricter laws to combat personalized advertising and the spread of hate speech and fake news. There was so much negativity attached to the Facebook brand name that Zuckerberg renamed his company Meta in 2021.
Other tech companies also got in the way; In 2022, Apple set high barriers in its software, making it more difficult for Meta to collect personal data from iPhone users. Yet the social network manages to navigate past Apple's limitations and still collect data for its advertising network. Smarter artificial intelligence, also a spearhead of Meta, ensures that advertising is served to billions of users fully automatically. In the last quarter of 2023, Meta's revenue was $40 billion, up 25 percent from a year earlier. Net profit amounted to $14 billion.
Through the dust
Even though Meta is peaking on the trading floor, Zuckerberg still has to deal with what his network has achieved in the real world. Last week, he, along with representatives from Snap Inc., X, TikTok and Discord, sat before a U.S. Senate accountability committee. Again – it was his eighth hearing in the US – Zuckerberg publicly expressed regret for the disastrous effect social media can have on the lives of children – exploited, bullied or driven to despair over the internet. He addressed the parents of such victims present: “I apologize for everything you have gone through.”
However, despite 40,000 moderators and advanced algorithms, it seems impossible to keep Meta's social networks safe.
Meta generates almost all of its turnover from the sale of advertisements that are tailored to the online behavior of almost four billion users – Facebook, Instagram and WhatsApp combined. Zuckerbergs invests a lot of money in developing their own hardware. Meta's Reality Labs division produces computer glasses that allow you to play or wander around in virtual reality games metaversethe 3D internet dreamed of by Zuckerberg that has not yet gotten off the ground.
Reality Labs suffered a loss of $16 billion in one year, but in the past quarter its turnover exceeded $1 billion for the first time. That's a bright spot. In theory, Meta could benefit from the attention that Apple is attracting with the introduction of its computer glasses, the Vision Pro. It is the first new gadget category for Apple since the Apple Watch in 2015. The first version of the Vision Pro ($3,499) has been on sale in the US since this week – Meta's alternative, the Quest 3, is more affordable (from 550 euros) .
Apple also announced its results this week. Sales in the final quarter of 2023 amounted to $120 billion, an increase of 2 percent compared to last year. According to CEO Tim Cook, there are currently 2.2 billion devices that actively use Apple services. This resulted in Apple's Services division achieving record revenues of $23 billion. Net profit rose 13 percent to $34 billion. However, Apple's sales in China fell 13 percent to $20 billion.
The reactions to the Amazon figures were more positive: a quarterly turnover of 170 billion dollars (net profit of 10 billion). The share price of the online store and cloud giant rose by 8 percent. Amazon still has some catching up to do with Microsoft, the company that invested heavily in artificial intelligence in collaboration with OpenAI. That is starting to pay off, Microsoft announced this week. The software maker achieved a quarterly turnover of 62 billion and a net profit of 22 billion. With a market value of $3 trillion, Microsoft is the most valuable company in the world.
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