Meta (Facebook): profits and users reassure but the future remains uncertain

The Californian group generated $7.47 billion in net profit in the first quarter, down 21% year on year, for sales approaching $28 billion (+7%).

Meta gained users and made quarterly profits better than expected by the market in a complicated economic and political context for the parent company of Facebook and Instagram, from competition from TikTok to the war in Ukraine.

The Californian group generated $7.47 billion in net profit in the first quarter, down 21% year on year, for sales approaching $28 billion (+7%).

Its title jumped almost 19% during electronic trading after the closing of the New York Stock Exchange.

Above all, it has not lost users again.

No loss of users

In February, the social network admitted to losing, for the very first time, around one million active daily users.

At the end of March, Facebook had 1.96 billion daily users, and some 3.64 billion people worldwide use at least one of the group’s platforms (Facebook, Instagram, Messenger, WhatsApp) every month, two figures up slightly.

But “Facebook user growth is stagnating,” said eMarketer analyst Debra Aho Williamson.

“So it falls to Instagram to serve as an engine of growth,” she added. “The Metaverse is generating a lot of press, but Horizon Worlds, Meta’s VR social platform, only has a few hundred thousand users at this point.”

Mark Zuckerberg’s group changed its name in October to signal a shift in strategy. The social networking giant intends to focus on the “metaverse”, considered in Silicon Valley as the future of the internet: a parallel universe where the public will use augmented or virtual reality glasses to interact, work or be entertained.

The TikTok racing car

In the immediate future, the world’s second largest player in online advertising is facing many headwinds.

Rules imposed by Apple last year – to prevent apps from harvesting user data for advertising purposes without permission – are affecting its bottom line.

This issue, “combined with the rise of TikTok, brand concerns over problematic content, and changing user behaviors on social media, heralds turbulence for Meta’s ad revenue,” commented analyst Jasmine Enberg. from Insider Intelligence.

“It is still clear that advertisers continue to use Facebook and Instagram to reach their huge audiences,” she nuanced.

Hugely popular rival app TikTok is chipping away at audience share from every major platform, from YouTube to Instagram, which has copied its funny short video formats (along with “YouTube Shorts” and “Reels”, respectively).

“Our transition to short formats is not yet generating substantial revenues for the moment, but we are optimistic,” assured Mark Zuckerberg, the group’s boss, during the conference call with analysts.

“As with ‘Stories’ (the ephemeral format copied from Snapchat, editor’s note), it will take several years,” said Sheryl Sandberg, director of operations.

Call to believers

Meta, like its neighbor Google, will suffer in 2022 from comparisons with the year 2021, marked by the explosion of online uses, thanks to the pandemic.

The two companies have also recruited a lot: Meta now employs more than 77,800 people, 28% more over one year.

And it’s not over: Mark Zuckerberg has called on engineers who want to build the metaverse “and work on incredible artificial intelligence projects” to join him.

“I know some people criticize the advertising model but it generates a lot of value for businesses and people around the world. Those who believe in it, and want to grow it, I want them here too,” he said. insisted.

New laws

In addition to Apple’s changes, social networks must deal with new European laws.

Some conflicts related to the European Regulation on personal data, which date from 2018, are not yet resolved, and Europe has just passed new legislation to force platforms to remove illegal content and to cooperate with the authorities.

The American group is also suffering from inflation, which forces advertisers to tighten their budgets, and the consequences of the war in Ukraine: Facebook and Instagram have been blocked in Russia, and no longer accept Russian advertisements in the world in general. .

Meta therefore expects “revenues of between $28 billion and $30 billion in the second quarter of 2022”, a stagnation compared to its turnover of 29 billion in the same period a year ago.

We would like to say thanks to the writer of this article for this awesome web content

Meta (Facebook): profits and users reassure but the future remains uncertain

We have our social media pages here and other pages related to them here.