Meta Platforms, the former Facebook, has hit a negative milestone: the first year-on-year drop in revenue it has suffered since it went public, in a sign of the cooling off of the social media industry and its growing competition, especially from TikTok. In addition, the drop has been worse than expected by the experts, who placed it at 0.5%. The hope for the firm is that the section dedicated to the ‘metaverse’, which it wants to focus on for the future, has exceeded expectations.
Thus, Meta continues, which is already around 50%, with falls that have reached 5% in the ‘after hours’ to soften in the following minutes according to the numbers. The firm has missed its revenue and profit forecasts. The firm earned $2.46 per share, compared with $2.59 expected and $3.61 a year earlier. Likewise, it entered 28,820 million dollars, compared to the 28,940 million that analysts calculated and the 29,080 that it registered in the same period of 2021.
All this despite the fact that the numbers of active users have complied with what was announced: 10 million more daily active users (1,970 compared to 1,960 estimates) and 10 fewer monthly users (2,930 million monthly compared to 2,940 million estimates).
In a sign of the company’s discontent with its numbers, chief financial officer David Wehner has announced his move to chief strategy officer, the company reported.
, where revenues have been 5.3% lower than expected, and in its apps business, which have registered 3.6% worse numbers. The virtual reality sector, however, is the most positive sign: its losses are 18.7% lower than feared, only 2,806 million dollars, which indicates that the firm’s change of direction towards the ‘metaverse’ is not being so terrible for its numbers.
Crisis in social networks
In this way, Meta joins the bleeding of social networks after the results of Snap, which opened Pandora’s box. This firm doubled its expected losses to $32 million. This is in contrast to an increase in active users that improved even the most generous forecasts. However the problem was the loss of advertising revenue so the company had an “incredibly difficult” future with “basically flat” revenue in a high inflation environment.
After learning about the ‘Snapchat crisis’, the company plummeted up to 39% in a single day on the stock market. Some losses that also strongly hit the rest of the social networking platforms or those that depended on online advertising, such as the case of Google. Investors, because of this, have looked at the entire sector to see if this problem was replicated and, for the moment, it seems that Facebook is also showing signs of concern.
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