Mark Zuckerberg will surely have checked the dislike option to the latest known economic data from Meta. The company, formerly known as Facebook, has posted a loss in revenue for the first time in a quarter since it went public in 2007. The figure is not worrying, it is about 1%, but the amount is: just over 29 million dollars compared to the second quarter of 2021.
And all this in a context where Meta has established a clear containment strategy: it is reducing general expenses items, hiring and weathering as best it can the continuous investigations -and even fines- that from time to time arrive like a pitcher of cold water to the company. The last? The SEC investigation.
The CEO of Meta Platforms, Zuckerberg, declared this Wednesday at the company’s results conference that the economy seems to be in a recession phase, “many teams are going to be reduced so that we can transfer energy to other areas within of the company. I want to give our leaders the ability to decide within their teams where to double staff, where to fill layoffs and where to restructure teams (…) despite the current challengesI have a lot of confidence in the long term.”
For her part, the outgoing director of operations, Sheryl Sandberg, went further. And she blamed this decline on the current value of the euro, “changing trends had a significant impact in the second quarter, in particular the depreciation of the euro relative to the dollar (…) on a constant currency basis, we would have seen 3% revenue growth”.
Crisis now, hope for the near future
The truth is that Meta is in a rarefied moment, although it is not something that catches the company again, nor is it all the fault of the economic crisis. The push of other social networks is causing enough damage to the company. Two quarters ago, Facebook already reported a significant loss of daily active users, something historic. The situation has been able to reverse slightly but the situation is not entirely clear, since this last quarter the monthly active users fell, especially those from Europe, where Russia has banned access to Meta. Of course, globally the figures have risen 4% year after year.
there is no doubt that Instagram is now the main staff of the companyalthough there are many critical voices that affirm that Meta is in the slipstream of TikTok imitating aspects of its strategy and emphasizing actions such as, for example, the format of short videos. Something that is also tiring a good part of its users, oversizes for this type of content that, even, companies are already imitating in their marketing and brand strategies.
“About 15% of the content in a person’s Facebook feed and slightly more than that in their Instagram feed is recommended by our AI from people, groups or accounts you don’t follow (…) we expect these numbers to double with you grow up by the end of next year,” Zuckerberg said.
It also indicated that Meta users have spent 30% more time watching Reels than last quarter. Even though the monetization of Reels is still developing, the product has apparently crossed the $1 billion mark in terms of annual revenue.
From the company, despite everything, they are optimistic. They claim that as the metaverse becomes more important in everyday life, in entertainment, in work, in education or in commerce, all these current decisions will be “laying the foundation” for a great 2030. For now , Meta shares have fallen 4% this week.