The profits of Meta (Facebook) melt, its workforce and its users stagnate

A person walks past Meta’s headquarters in Menlo Park, California on October 28, 2021 ( GETTY IMAGES NORTH AMERICA/JUSTIN SULLIVAN )

Falling revenues, halved net profit, stagnation in the number of users: Meta, (Facebook, Instagram, WhatsApp) is going through a bad patch, but its boss Mark Zuckerberg is not bending from his Grail, building the metaverse.

The Californian group saw its net profit melt to 4.4 billion dollars in the third quarter (-52% over one year) and its turnover fell by 4%, to 27.7 billion dollars.

“We are facing an unstable macro-economic environment, increased competition, advertising targeting issues and increased costs for our long-term investments, but I must say that our products seem to be doing better than some comments. do not suggest it”, tried to temper Mark Zuckerberg on Wednesday, during the conference with analysts.

Worry lost: Meta plunged 12% after the publication of the results, then 19% after the conference, during electronic trading after the close of the New York Stock Exchange.

The social media giant “is standing on shaky legs,” said Insider Intelligence analyst Debra Aho Williamson. The leader’s decision “to focus his business on the future promise of the metaverse has diverted his attention from the harsh reality of today.”

The company has been worrying the markets since the beginning of the year, when the group first announced that it had lost users on its original social network, Facebook.

In all, some 3.71 billion people use at least one of the company’s services (social networks and messaging) every month, only 1.6% more than before the summer.

-Apple-

A year ago, Facebook became Meta and projected itself into a glorious future where its users could find themselves in the metaverse, a parallel universe described as the future of the internet.

But “Meta in 2022 has little to do with Facebook a year ago,” said Debra Aho Williamson. “The company is no longer at the forefront of innovation, its grip on its market is weakening, and the promise of the metaverse, at the heart of Mark Zuckerberg’s vision for the future of his company, is facing to consumer apathy, professional skepticism and the realities of a declining global economy.”

Like Google (Alphabet), Meta is suffering from inflation and rising interest rates, which lead many advertisers to scale back their marketing budgets.

In the third quarter, the online search giant achieved the weakest revenue growth since 2013, apart from the start of the pandemic.

Apple’s new rules, which require apps to ask users’ permission to track them and send them ads, have also made things much harder for Facebook and Instagram.

On Monday, the iPhone manufacturer also announced that purchases of “boosts”, these tools which allow content to be promoted on social networks, would now be treated as expenses in the application, in the same way as purchases. bonuses in video games, for example.

But Apple takes a 30% commission on these expenses in the applications. Meta will therefore lose part of its advertising revenue on Facebook and Instagram.

“Apple continues to evolve its regulations to grow its own business while undermining others in the digital economy,” a Meta spokesperson said Wednesday.

-TikTok-

The group has little recourse against the global economic context or its powerful neighbor at the apple, but Mark Zuckerberg welcomed the progress of “reels”, a format of short videos copied from the very popular TikTok.

“More than 140 million reels are played on Facebook and Instagram every day, which is 50% more than six months ago,” he announced. “And we think we’re gaining time spent market share (on our apps) from competitors like TikTok.”

He also clarified that the group’s workforce should not increase by the end of 2023, or even decrease slightly. Meta had some 87,000 employees worldwide as of September 30.

In terms of investments, he explained that they would first go to “artificial intelligence technologies that help recommend reels to users”, “messaging advertising tools” and “our vision for the metaverse”. .

“These priorities make sense, given the direction the world seems to be heading in,” the boss added.

The Reality Labs branch, responsible for virtual and augmented reality platforms and equipment, widened its losses from $2.6 billion to $3.7 billion in the third quarter.

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The profits of Meta (Facebook) melt, its workforce and its users stagnate


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