Facebook Owner Meta To Lay Off 11,000 Staff

This file photo taken on October 28, 2021 shows the META logo on a laptop screen in Moscow.  (Photo by Kirill KUDRYAVTSEV / AFP)

 

Facebook owner Meta will lay off more than 11,000 of its staff in “the most difficult changes we’ve made in Meta’s history,” boss Mark Zuckerberg said on Wednesday.

He said the cuts represented 13 percent of the social media titan’s workforce and would affect its research lab focusing on the metaverse as well as its apps, which include Facebook, Instagram and WhatsApp.

The tech industry is in a serious slump and several major firms have announced mass layoffs — Twitter’s new owner Elon Musk fired half its staff last week.

“I want to take accountability for these decisions and for how we got here,” Zuckerberg said in a note to staff.

“I know this is tough for everyone, and I’m especially sorry to those impacted.”

Ad-supported platforms such as Facebook and Google are suffering with advertisers looking to cut costs as they struggle with inflation and rising interest rates.

Zuckerberg told 87,000-strong staff he had expected the boost in e-commerce and online activity during the Covid pandemic to continue, but added: “I got this wrong, and I take responsibility for that.”

The downturn has affected companies across the sector, with Apple and Amazon also recently announcing results that disappointed investors.

But Meta also faces some unique problems of its own.

The California-based company is being squeezed by Zuckerberg’s decision to devote billions of dollars to developing the metaverse, an immersive version of the web accessed via virtual reality headsets.

Zuckerberg renamed the company Meta a year ago to reflect the commitment to the project, but the division working on metaverse technology has since made losses of more than $3.5 billion.

Facebook is also struggling to fend off Chinese-owned TikTok, the now dominant social media for younger users to the detriment of Meta’s Instagram.

– ‘Last resort’ –
Mike Proulx, a research director at Forrester, said “Meta is amidst an identity crises” and that severe cost-cutting was “inevitable.”

“The company has one foot in a risky long-term metaverse bet and another foot failing to compete with TikTok,” he added.

Zuckerman has hinted several times this year that belt-tightening measures were just around the corner and said in his letter on Wednesday that staff layoffs were a “last resort.”

Meta would also keep a hiring freeze going into next year, he said, and other spending cuts were envisaged.

“Fundamentally, we’re making all these changes for two reasons: our revenue outlook is lower than we expected at the beginning of this year, and we want to make sure we’re operating efficiently,” Zuckerman wrote.

The measures were also a message to Wall Street, where the company’s poor performance has sent the Meta share price plummeting by 70 percent since the start of the year.

Last month, Meta announced profits of $4.4 billion in the third quarter, a 52 percent decrease year-on-year.

The slump in profits comes despite its platforms dominating the world in terms of users — Facebook alone claims to have around two billion people who log on daily.

AFP

Meta’s Quarterly Profit Dives As Tough Economy Hits Tech

Meta CEO, Mark Zuckerberg

 

Facebook-parent Meta reported Wednesday that its profit more than halved to $4.4 billion in the third quarter from $9.2 billion a year earlier, and said it plans “significant changes” to bolster efficiency in a tough economic environment.

The social networking giant, which faces stagnating user numbers and cuts in advertising budgets, also said revenue slipped to $27.7 billion from $29 billion a year earlier.

“We’re approaching 2023 with a focus on prioritization and efficiency that will help us navigate the current environment and emerge an even stronger company,” said Meta chief Mark Zuckerberg.

Meta shares plunged 19.1 percent to $105 in after-market trades, the price less than a third of what it was at the start of this year.

“While we continue to navigate some challenging dynamics – a volatile macro economy, increasing competition, ad signal loss and growing costs from our long term investments — I have to say that our product trends look better from what I see then some of the commentary I’ve seen suggests,” Zuckerberg told analysts on an earnings call.

The number of monthly active users at Facebook was up just two percent to 2.96 billion at the end of September, Meta reported.

Meanwhile, the number of employees at the tech titan tallied 87,314, a 28 percent increase from a year earlier, the earnings report stated.

“We are making significant changes across the board to operate more efficiently,” Meta said in the release.

The Silicon Valley-based tech firm said that it expects to hold headcount levels in check over the next year.

Zuckerberg said that while tightening its belt, Meta will focus on its artificial intelligence that powers recommendations at offerings such as short-form video feature Reels, as well as ad messaging platforms and its vision for the metaverse.

– Apple squeeze –
Big tech platforms have been suffering from the economic climate, which is forcing advertisers to cut back on marketing budgets, and Apple’s data privacy changes, which have reduced leeway for ad personalization.

“Meta is on shaky legs when it comes to the current state of its business,” said Insider Intelligence principal analyst Debra Aho Williamson.

“Mark Zuckerberg’s decision to focus his company on the future promise of the metaverse took his attention away from the unfortunate realities of today.”

Those realities include Meta being under pressure due to global economic conditions, competition including TikTok, and Apple letting iPhone users curb collection of data “signals” for targeting money-making ads, according to the analyst.

Apple last year began letting iPhone users decide whether to allow their online activity to be tracked for the purpose of targeting ads — a change which it said shows its focus is on privacy, but which critics note does not prevent the company itself from tracking.

Meta expected that policy, which impacts the precision of the ads it sells and thus their price, to cost the social media giant $10 billion in lost revenue this year.

This week, Apple updated its App Store rules to require that apps offered there use its payment system for sales of “boosted” posts, which are essentially ad messages promoted to the top of social media feeds for a price.

The App Store is the lone gateway for digital content to get onto iPhones or iPads.

The change means that Apple will be able to collect its 30 percent commission on that type of advertising at Facebook and Instagram, where all the money made previously had gone to Meta because they used their own payment system.

“Apple continues to evolve its policies to grow their own business while undercutting others in the digital economy,” Meta said in reply to an AFP inquiry.

“Apple previously said it didn’t take a share of developer advertising revenue, and now apparently changed its mind.”

Meta had long delivered seemingly endless upward growth, but reported early this year its first decline in global daily users.

In July, Meta reported its first quarterly revenue drop and a plunging profit.

AFP

UK Orders Meta To Sell Giphy After Failed Appeal

(FILES) This file photo taken on October 28, 2021 shows the META logo on a laptop screen in Moscow. – Russia on October 11, 2022 added US tech giant Meta, the parent company of Instagram and Facebook, to a list of “terrorist and extremist” organisations, according to a database of the Federal Service for Financial Monitoring (Rosfinmonitoring). Russia in late March banned Facebook and Instagram for “carrying out extremist activities” after authorities accused Meta of tolerating “Russophobia” during Russia’s military campaign in Ukraine. (Photo by Kirill KUDRYAVTSEV / AFP)

 

 

A UK competition regulator on Tuesday re-issued its order for Facebook owner Meta to sell animated graphics startup Giphy in a final decision after a failed appeal.

The Competition and Markets Authority (CMA) said in a statement that Giphy must be “sold off in its entirety”, having already ruled last year that the acquisition would hit competition and advertising.

The regulator has again ordered the sale after the US tech giant lost an appeal over the purchase.

The watchdog argued the deal would limit choice for UK social media users and reduce innovation in UK display advertising.

“The CMA has concluded the only way to avoid the significant impact the deal would have on competition is for Giphy to be sold off in its entirety to an approved buyer,” it said in a final verdict.

Giphy is a platform and search engine for “stickers” and other products using the graphics interchange format, or GIFs.

Meta had announced the purchase for a reported $400 million in May 2020.

“This deal would significantly reduce competition in two markets,” added Stuart McIntosh, chair of the CMA’s inquiry group, in the statement.

“It has already resulted in the removal of a potential challenger in the UK display ad market, while also giving Meta the ability to further increase its substantial market power in social media.

“The only way this can be addressed is by the sale of Giphy.”

McIntosh said that the sale would promote “innovation in digital advertising, and also ensure UK social media users continue to benefit from access to Giphy.”

In response, Meta expressed disappointment but said it would “accept today’s ruling as the final word on the matter”.

“We are grateful to the Giphy team during this uncertain time for their business, and wish them every success,” said a Meta spokesperson.

“We will continue to evaluate opportunities — including through acquisition — to bring innovation and choice to more people in the UK and around the world.”

New York-based Giphy, founded in 2013, is one of the world’s top GIF-sharing platforms with more than 700 million daily users.

The CMA had in late 2021 fined social media giant Facebook, whose parent group is now known as Meta, more than £50 million for deliberately failing to provide details of the takeover.

Meta Unveils New Virtual Reality Headset Quest Pro

In this undated image courtesy of Meta Connect a person experiences the new Meta Quest Pro VR headset. – A year after it rebranded itself in the name of building a metaverse, Meta on Tuesday unveiled a new version of its virtual reality headset tailored for working professionals.
The $1,500 Meta Quest Pro features a number of new features that are meant to improve users’ perception of truly being in the presence of other people. (Photo by – / Meta Connect / AFP)

 

 

A year after it rebranded itself in the name of building a metaverse, Meta on Tuesday unveiled a new version of its virtual reality headset tailored for working professionals.

The $1,500 Meta Quest Pro features a number of new features that are meant to improve users’ perception of truly being in the presence of other people.

The headset makes it possible to view not only virtual worlds but also the real environment of the user, thanks to high-resolution outward-facing cameras.

“The moment that they begin to break into a smile or when they raise their eyebrow… your avatar should be able to express all of that and more,” Meta chief Mark Zuckerberg said at Meta Connect, the company’s giant’s annual conference focused on virtual reality.

Customers can begin ordering the Quest Pro starting Tuesday, and the device will ship at the end of the month.

Meta said it is partnering with Microsoft and others to tune popular business and productivity software to virtual worlds using Quest Pro.

Capabilities being worked on include using Quest Pro during virtual meetings on the Microsoft Teams platform, according to the two companies.

“At Microsoft, we’re incredibly excited about the metaverse and how digital and physical worlds are coming together,” Microsoft CEO Satya Nadella said during the presentation.

Facebook renamed itself Meta in October 2021 to signal a pivot to building its vision for an interactive virtual and augmented reality world that it sees as the future.

The move came as the company was facing a backlash after a whistleblower leaked documents suggesting the social media giant put profits over safety.

Meta is undergoing a difficult period financially due to dropping advertising revenues and fierce competition from other platforms such as TikTok, whose popularity has exploded.

About a third of the apps in the Quest app store brought in millions of dollars in revenue since launching there, according to Meta chief technology officer Andrew “Boz” Bosworth.

Some $1.5 billion has been spent overall on games and apps in the Quest store, and titles on the way to its virtual shelves include an “Iron Man” game set for release in November by Marvel Entertainment and Sony Interactive Entertainment, according to Meta executives.

Meta Warns Of Password Stealing Phone Apps

A photo collage of Mark Zuckerberg and Meta logo

 

Meta warned a million Facebook users Friday that they have been “exposed” to seemingly innocuous smartphone applications designed to steal passwords to the social network.

So far this year, Meta has identified more than 400 “malicious” apps tailored for smartphones powered by Apple or Android software and available at the Apple and Google app stores, director of threat disruption David Agranovich said during a briefing.

“These apps were listed on the Google Play Store and Apple’s App Store and disguised as photo editors, games, VPN services, business apps and other utilities to trick people into downloading them,” Meta said in a blog post.

The apps often ask people to login with their Facebook account information to use promised features, stealing usernames and passwords if entered, according to Meta’s security team.

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“They are just trying to trick people into entering in their login information in a way that enables hackers to access their accounts,” Agranovich said of the apps.

“We will notify one million users that they may have been exposed to these applications; that is not to say they have been compromised.”

More than 40 percent of the apps Meta listed involved ways to edit or manipulate images, and some were as seemingly simple as using smartphones as flashlights.

“Our sense is these types of malicious app developers try to target multiple services,” Agranovich said, noting the app creators are likely after passwords to more than just Facebook accounts.

“The targeting here seemed to be relatively indiscriminate — get people to download the applications around the world in an attempt to get access to as many login credentials as possible.”

Meta said that it shared what it discovered with Apple and Google, who control what is offered at their respective app shops and each vet offerings.

Apple did not respond to questions regarding whether it took action against any of the apps Meta deemed malicious.

But Google said that most of the apps Meta flagged had already been identified and removed from the Play store by its own vetting systems.

“All of the apps identified in the report are no longer available on Google Play,” a spokesperson told AFP.

“Users are also protected by Google Play Protect, which blocks these apps on Android.”

AFP

Meta To Freeze Hiring To Tighten Budget

Facebook’s new rebrand logo Meta is seen on smartpone in front of displayed logo of Facebook, Messenger, Intagram, Whatsapp and Oculus in this illustration picture taken October 28, 2021. REUTERS/Dado Ruvic/Illustration

 

 

Facebook-parent Meta put out word to employees on Thursday that it will freeze hiring to cut costs as it endures tough economic times, The Wall Street Journal reported.

Meta chief Mark Zuckerberg revealed a planned pause in hiring during a weekly all-hands meeting, the Journal reported, saying the move came as the social media titan planned to cut expenses by at least 10 percent.

Meta declined to comment on the report, instead referring AFP to remarks Zuckerberg made in July when the company reported its first quarterly revenue drop and a plunging profit.

Zuckerberg said during an earnings call that teams would shrink in order to “reallocate our energy” as it battled a turbulent economy and the rising phenomenon of TikTok.

Meta had long delivered seemingly endless upward growth, but reported early this year its first decline in global daily users.

“This is a period that demands more intensity, and I expect us to get more done with fewer resources,” Zuckerberg told analysts during an earnings call.

Big tech platforms have been suffering from the economic climate, which is forcing advertisers to cut back on marketing budgets, and Apple’s data privacy changes, which have reduced leeway for ad personalization.

Snap and e-commerce colossus Amazon are among tech firms that have announced workforce cuts this year.

US Jury Orders Meta To Pay $174.5mn For Violating Patents

(FILES) In this file photo taken on October 28, 2021 the META logo on a laptop screen in Moscow as Facebook chief Mark Zuckerberg announced the parent company’s name is being changed to “Meta” to represent a future beyond just its troubled social network. (Photo by Kirill KUDRYAVTSEV / AFP)

 

 

A US jury on Wednesday ordered Meta to pay $174.5 million for violating live-streaming patents developed by a US Army veteran seeking to fix shortcomings in battlefield communications.

A trial in Texas federal court ended with jurors deciding that “live” features at Facebook and Instagram used technology patented by Voxer, a company co-founded by Tom Katis, legal documents showed.

“We believe the evidence at trial demonstrated that Meta did not infringe Voxer’s patents,” a company spokesperson said in response to an AFP inquiry.

“We intend to seek further relief, including filing an appeal.”

Katis had reenlisted in the army after the September 11, 2001 attacks in the United States and served as a Special Forces communications sergeant in Afghanistan, court filings said.

When his combat unit was ambushed in Kunar province, he felt that the systems for coordinating reinforcements, medical evacuations and more “were ill-suited for time-sensitive communications with multiple groups in a highly disruptive environment,” the complaint said.

“Mr. Katis and his team began developing communications solutions in 2006 to remedy these shortcomings,” his lawyers said.

“The new technologies enabled transmission of voice and video communications with the immediacy of live communication and the reliability and convenience of messaging.”

Facebook approached San Francisco-based Voxer about potential collaboration after it launched a Walkie Talkie app in 2011, but no agreement was reached, according to legal documents.

Instead, the lawsuit argued, Facebook went on to launch Facebook Live and Instagram Live, incorporating Voxer technology into the features.

Facebook’s Meta Posts First-Ever Revenue Drop

(FILES) In this file photo taken on October 28, 2021 the META logo on a laptop screen in Moscow as Facebook chief Mark Zuckerberg announced the parent company’s name is being changed to “Meta” to represent a future beyond just its troubled social network.  (Photo by Kirill KUDRYAVTSEV / AFP)

 

 

 

Facebook-parent Meta reported on Wednesday its first quarterly revenue drop and a plunging profit as the social media powerhouse battles a turbulent economy and the rising phenomenon of TikTok.

Meta had long delivered seemingly endless upward growth but after this income miss — and reporting earlier this year its first decline in global daily users — the company sounded a more modest tone.

“This is a period that demands more intensity, and I expect us to get more done with fewer resources,” CEO Mark Zuckerberg told analysts after the firm reported a 36 percent drop in profit to $6.7 billion.

Meta also said that revenue in the recently ended quarter ebbed a percent to $28.8 billion, its first such slip since the firm, then known simply as Facebook, went public in 2012.

“The year-over-year drop in quarterly revenue signifies just how quickly Meta’s business has deteriorated,” said analyst Debra Aho Williamson.

“The good news, if we can call it that, is that its competitors in digital advertising are also experiencing a slowdown.”

Meta however reported an increase in daily Facebook users to 1.97 billion, defying analysts’ predictions of a drop, but noted monthly users fell about two million to 2.93 billion.

Its shares were down around 3.5 percent in after-hours trading, continuing a decline in the firm’s stock since February that has erased about half of its value.

Meta has also faced steady scrutiny from lawmakers and regulators over not only its massive strength in the social media market, but also its impact on the health of its users.

The results came just hours after US regulators announced they would try to block Meta’s acquisition of virtual reality fitness app maker Within, a potential blow to the tech giant’s metaverse ambitions.

– US targets Meta VR purchase –
“This acquisition poses a reasonable probability of eliminating both present and future competition,” the FTC complaint said. “And Meta would be one step closer to its ultimate goal of owning the entire ‘Metaverse.'”

Meta is focused on building its metaverse vision for the internet’s future, betting heavily on the interactive virtual world that the company believes will ensure its powerful position.

The social media giant said the FTC’s move defied reality, and expressed confidence that its buy of Within would be good for VR users as well as developers who make apps in that market.

“The FTC’s case is based on ideology and speculation, not evidence,” Meta said in response to an AFP inquiry.

Meta has also faced turbulence as it tries to adapt its platforms to better battle short-video app TikTok, which is threatening the Silicon Valley giant’s primacy.

Meta-owned Instagram is attempting to quell complaints by users including celebrities Kylie Jenner and Kim Kardashian who say changes have made it too much like TikTok, including video recommendations.

Instagram chief Adam Mosseri posted a video on Twitter addressing the complaint, saying a number of changes were being experimented with and promising not to abandon photo sharing at the service.

“We are going to continue to support photos, it is part of our heritage,” Mosseri said.

Earnings season has gotten off to a less than great start with disappointing reports from Netflix, Snapchat’s parent company and Microsoft.

Snap announced plans last week to “substantially” slow recruitment after bleak results wiped some 30 percent off the stock price of the tech firm, which is facing difficulties on several fronts.

Even juggernaut Google reported its profit and revenue slipped as the internet giant’s long sizzling ad revenue growth cooled, but the market seemed relieved the news wasn’t worse.

The big tech platforms have been suffering from the economic climate, which is forcing advertisers to cut back on their marketing budgets, and Apple’s data privacy changes, which have reduced their leeway for ad personalization.

Instagram Beefs Up Child Protection Measures

A photo taken on March 14, 2022, shows the US social network Instagram logo on a smartphone screen in Moscow.  AFP

 

 

Social media giant Meta said on Tuesday it was rolling out a slew of measures to boost the safety of young users on its Instagram platform, the latest firm to address the issue.

Campaigners have long criticised tech giants for failing to protect teenagers from harmful content, and the popularity of Instagram with young people has placed it firmly in the firing line.

Meta, which also owns Facebook and WhatsApp, said parents and guardians would be able to set time limits on children’s scrolling on Instagram.

And young users would now see nudges encouraging them to look at other subjects if they are spending too much time looking at content about a single topic.

“It is crucial for us to develop tools that respect the privacy and autonomy of young people while involving parents in the experience,” said Clotilde Briend of Meta during a media briefing.

Instagram was rocked last year by revelations from whistleblower Frances Haugen that suggested executives were aware the platform could harm the mental health of young users, particularly teenage girls.

Meta has consistently denied the claims but has since faced a series of grillings in US Congress and suggestions that regulation could be on the way.

Other apps, including video-sharing platform TikTok, have also been criticised over fears young people were finding it hard to tear themselves away from the content.

Last week, TikTok announced young people would get nudges to remind them to take a break from scrolling — similar to an Instagram feature that has already been rolled out.

On Tuesday, Meta also announced new measures for its virtual reality headsets.

Parents and guardians will be able to block apps, view what their child is looking at on another device and see how long their child is spending with their headset on.

Zuckerberg Staying At Meta Helm For Years ‘Makes Sense’: Clegg

#ZuckerBowl Without A Clear Winner As Facebook Hearings End
Facebook CEO Mark Zuckerberg. (JIM WATSON / AFP)

 

 

Mark Zuckerberg’s presence at the helm of Facebook parent Meta for “many, many years” would be perfectly natural, his global affairs director has told AFP, even as the founders of many tech companies hand off to fresh blood.

Succession at the mega company has been in the headlines in recent weeks with the announcement of the departure of Sheryl Sandberg after 14 years as the firm’s number two.

But while the founders of companies like Amazon, Twitter and Google have all moved on, Zuckerberg has shown no sign of giving up the reins — despite raging criticism over privacy scandals and the rampant spread of misinformation across Facebook.

Now as Meta rolls out its plans for the metaverse — the immersive virtual world that it considers the future of the internet — there’s no reason for the 38-year-old to go anywhere anytime soon, said Nick Clegg, the company’s director of global affairs.

“It’s a multi-year project. It would make sense to me that Mark Zuckerberg would want to continue, to build this new chapter of the company, and that’s going to last for many years, many years,” Clegg told AFP on the sidelines of the Summit of the Americas in Los Angeles.

“He is the founder of the company, of Meta, but he is also the architect of the new chapter, of this construction, of these augmented reality and virtual reality technologies.”

Facebook bought virtual reality headset maker Oculus in 2014 and launched a social VR platform.

The technology has taken off in the gaming industry, and become popular among players of Fortnite and Roblox.

But Clegg, a former British deputy prime minister, said the metaverse promised great opportunities in the fields of education and medicine, as well as entertainment.

For example, he said, teachers can take their students on a virtual trip through ancient Greece, and medics can learn sophisticated surgical techniques.

And, he said, as hardware improves, the need for specialist equipment will diminish.

“In years to come, people will be able to access these new technologies through their phones,” he said.

“We are exploring how we can increase access to everyone and not just people who can afford the new and latest hardware.”

No Plans To Quit Europe Amid Data Spat, Says Facebook’s Meta

This illustration photo taken in Los Angeles on October 28, 2021, shows a person using Facebook on a smartphone in front of a computer screen showing the META logo.  (Photo by Chris DELMAS / AFP)

 

Facebook’s parent firm Meta said Monday it has no plans to pull its services from Europe, after raising the possibility amid an ongoing row over transferring European data to the United States.

Data is central to the ad business that generates nearly all of the company’s billion of dollars in revenue, and frameworks that have overseen the transfer of information from the continent are now in limbo.

“We have absolutely no desire and no plans to withdraw from Europe, but the simple reality is that Meta, and many other businesses, organisations and services, rely on data transfers between the EU and the US in order to operate global services,” the firm said in a statement.

The crucial “Privacy Shield” online data arrangement between Europe and the United States was invalidated in July 2020 in a top EU court decision that threw transatlantic big tech into legal uncertainty.

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Meta also noted in a filing Thursday to US market regulators that the bases it uses for data transfer are also in legal and regulatory jeopardy.

“If a new transatlantic data transfer framework is not adopted… we will likely be unable to offer a number of our most significant products and services, including Facebook and Instagram, in Europe,” Meta wrote in its Securities and Exchange Commission filing.

European authorities and the US government are still talking through ways to resolve the issue.

The social media giant recently saw its worst-ever plunge in market value, after disappointing quarterly results that raised questions about its future.

Its signature Facebook platform saw a small dip in daily users globally at the end of 2021, the first such decline for a platform relentlessly focused on growth.

The company’s preoccupation with adding users was central to the whistleblower scandal last year, in which leaked internal documents underpinned press reports saying the company prioritized growth over safety.

AFP

Facebook Parent Meta Sheds $200bn In Stock Plummet

 In this file photo taken on October 23, 2019 Facebook Chairman and CEO Mark Zuckerberg testifies before the House Financial Services Committee on "An Examination of Facebook and Its Impact on the Financial Services and Housing Sectors" in the Rayburn House Office Building in Washington, DC. Nicholas Kamm / AFP
In this file photo taken on October 23, 2019 Facebook Chairman and CEO Mark Zuckerberg testifies before the House Financial Services Committee on “An Examination of Facebook and Its Impact on the Financial Services and Housing Sectors” in the Rayburn House Office Building in Washington, DC. Nicholas Kamm / AFP

 

Facebook’s parent firm Meta on Thursday plunged over $200 billion in stock value — comparable to the size of New Zealand’s economy — after results that raised doubts about the troubled social media giant’s future.

In addition to costs of big investments on its metaverse vision for the internet and trouble for its core ads business, the firm predicted slower growth and even reported its first dip in daily users globally on the signature Facebook platform.

Facebook has long been marked by an insatiable push for growth, and now has nearly two billion daily users, but the results laid bare the challenges facing the social media giant on several fronts.

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Shares have been down about 25 percent since shortly after the opening in New York, resulting in a more than $200 billion hit to the company’s market value.

“It was a disaster quarter for Facebook and clearly they have some major headwinds over the next year,” Wedbush’s Dan Ives said.

Facebook founder Mark Zuckerberg had some $25 billion in value wiped from his personal holding by the rout on Wall Street, according to filings on the company stock he owns.

Risk of not growing

Meta, which also owns Instagram and WhatsApp, has noted that it faces fierce competition for young users from the likes of explosively growing short-form video platform TikTok.

Ahead of results, analysts expected 1.95 billion daily active users on Facebook, but Meta reported 1.93 billion — a key indicator for where the platform is headed.

On the financial side, Meta reported a turnover of $33.67 billion, in line with its forecasts, but it made $10.3 billion in net profit in the fourth quarter, eight percent less than last year.

Investors also recoiled at Facebook’s report of losing roughly one million daily users globally between the last two quarters of 2021 — a fraction of the total but a potential signal of stagnation.

“It’s the first time the user base is shrinking,” said analyst Adam Sarhan from 50 Park Investment. “If the company is not growing, then it’s a complete reset for investors.”

It is essential to note Meta is a still massive and growing on the whole — as 2021 closed, 2.8 billion people used one of its four platforms and messenger services at least once a day, and 3.6 billion at least once a month.

One way out of Meta’s troubles would be to acquire the next big thing in social media, as it has done previously.

But the company is under considerable scrutiny from US regulators after the damning allegations that emerged from its whistleblower crisis last year.

The internal documents leaked by ex-worker Frances Haugen highlighted accusations that executives prioritized growth over keeping their billions of users safe.

However, Thursday’s dramatic sell-off is the latest to confront a Big Tech firm after a similar liquidation of Netflix shares last month, though the streaming giant has somewhat rebounded since.

Other tech giants such as Apple and Google parent Alphabet have rallied after results — though they both recently posted excellent numbers that calmed jittery markets.

Stocks have risen the last four days as the markets try to rebound from a bruising January pressured by worries over shifting US Federal Reserve policy and uncertainty over the crisis in Ukraine.

But the sharp fall in Meta and some other tech names “is raising doubts about the sustainability of the broader rebound effort,” said Briefing.com analyst Patrick O’Hare.

 

AFP