Facebook has been through a rollercoaster during the last few years. Allegations, privacy concerns, Congress, re-branding. They’ve had it all. Facebook took a risk when they re-branded to Meta Platforms as they made their bet on the virtual Metaverse. But reality has kicked in as the price fell 25% after earnings, marking a record of the biggest one day decline in market value.
Not the market leader they once were
Meta Platforms may need to accept that they do not have a hold of the social media market like they have done previously. New companies such as TikTok are proving a stumbling block for Meta, who are losing the attention-battle.
Not only are Meta and Facebook continuing their decline on social media decline, they are now also falling behind their other competitors, Alphabet, in advertising dominance. Google have handled the curve of privacy changes and personalised advertising well, posting growth on their main income driver. Meta have experienced the opposite as Mark Zuckerberg, CEO of Meta, said “There’s a clear trend where less data is available to deliver personalised ads”.
On top of “increased competition for people’s time”, Meta blamed the poor performance on “a shift of engagement within our apps”. It said people were watching more short-form videos that brought in less money than the advertising appearing in its feed.
Starting with an important figure for Meta, their daily active users (DAU). This fell compared to last quarter, the first time in their 18 year history. 1.929 billion compared to 1.93 billion previously.
Revenue rose 37% for the year, totalling $117.9B. Operating margin rose to 40%.
Advertising revenue rose 36%, below the 41% gain that Alphabet made.
Q4 profits were tainted by more investment by Meta into the Metaverse. This is the focus for the company as they seemingly accept a decline in previous revenue streams and look elsewhere for a revival.
AlphaPicks does not own a position in FB. To trade shares and crypto, register here with our preferred partner, EToro.