The giant is shrinking for the first time since its appearance.. Facebook is losing numbers of daily users
Facebook on Wednesday reported its first quarterly drop in daily users globally since it came out 17 years ago.
In addition, the company achieved less growth in advertisements than expected, which led to a decline in its shares by about 20%.
The massive drop in shares, which instantly wiped out nearly $200 billion of the company’s market value, shows that changing the Facebook brand to “Meta” is not enough to distract investors from the problems at its core social media business.
The main Facebook app lost 1 million daily users in North America, where it makes the most money through ads. This decrease led to an overall decrease in the number of daily users of Facebook globally, which was confirmed by a company spokesperson as the first sequential decline in the company’s history.
This drop from 1.93 billion in the third quarter to 1.929 billion daily users in the fourth is likely a reflection of young people’s lack of engagement with Facebook.
The statistic shows how Meta has struggled to stay relevant with younger users, who are increasingly drawn to competing apps like TikTok. Which puts more pressure on Meta’s big bet on the future of metaverse, the virtual reality-enabled alternate universe that CEO Mark Zuckenberg sees as the future of the internet.
Meta is still profitable despite that drop, having generated nearly $40 billion in revenue in the last year alone, mostly from advertising.
But it’s also losing billions in Reality Labs, the division responsible for the Quest VR headset, virtual reality software, upcoming AR goggles, and other related initiatives. Link to metaverse.
Meta also reported lower-than-expected earnings and revenue growth, which it says was driven in part by inflation and Apple’s new ad tracking privacy restrictions that limit Meta’s ability to sell ads. The company also faces constant scrutiny from government regulators around the world over antitrust concerns and content moderation.
There is now no doubt that Facebook, or META as it is now called, is facing a real challenge to its dominance of social media. The sway of the largest application of social media in this space is no longer taken for granted as it was more than a decade ago.