The descent into hell continues. Declining revenue, halved net profit, stagnant user count: Meta (Facebook, Instagram, WhatsApp) is going through a rough patch, but its boss, Mark Zuckerberg, is sticking to his holy grail: building the metaverse. Despite the indifference of the public and the doubts of Wall Street.
The Californian group saw its net profit melt to 4,400 million dollars in the third quarter (-52% in one year) and its turnover fell 4%, to 27,700 million dollars.
Meta plunged almost 20% after the posting of earnings in electronic trading after the close of the New York Stock Exchange. In just over a year, the company has lost nearly three-quarters of its value. If the stock opens at $104 in the morning, Meta will be worth just $280 billion, a level not seen since 2016.
Like Google (alphabet), Meta suffers from inflation and rising interest rates, leading many advertisers to cut their marketing budgets. “We are facing an unstable macroeconomic environment, increased competition, advertising targeting issues and higher costs for our long-term investments, but I must say that our products seem to be doing better than some comments, I am not suggesting it,” he tried. to temper Mark Zuckerberg on Wednesday during the analyst conference.
Apple’s new rules, which require apps to ask users for permission to track them and serve them ads, have also made things much more difficult for Facebook and Instagram.
The social media giant “is standing on shaky legs,” responded Debra Aho Williamson, an analyst at Inside Intelligence. 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.”
In total, some 3,710 million people use at least one of the company’s services (social networks and messaging) each month, only 1.6% more than before the summer.
Colossal Metaverse Losses
The group has little recourse against the global economic backdrop or its powerful neighbor down the block, but Mark Zuckerberg hailed the advancement of “reels,” a short video format copied from the wildly 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 market share of time spent (in our apps) from competitors like TikTok.”
The Reality Labs arm, responsible for virtual and augmented reality platforms and equipment, widened its loss from $2.6 billion to $3.7 billion in the third quarter. And it shouldn’t work in 2023.
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