Facebook reveals a first-ever decline in global users
Facebook’s latest quarterly figures have not impressed investors with $200 billion wiped off the company’s market value.
The massive stock drop is the result of its first-ever quarterly decline of daily users globally, coupled with lower-than-expected ad growth
User growth was flat across Facebook, Instagram, and WhatsApp, with the main Facebook app losing one million daily users in its most lucrative market – North America. It fell to 1.929 billion daily users from 1.93 billion the previous quarter.
The company is still highly profitable. Last year it made over $40 billion in profit mainly from advertising.
It is however contending with both a mature social media market that shows little potential for growth and the requirement to invest heavily in its plans for the future – namely its metaverse initiatives.
Mark Zuckerberg’s vision for the company is built around the potential of VR and AR becoming the next major computing platform. This is reflected in the company’s rebrand to Meta. The issue is though while the metaverse is developing as a concept it could take a decade before it becomes mainstream.
It has lost millions in developing Reality Labs, the division responsible for the Quest VR headset, VR software, forthcoming AR glasses, and other metaverse-related initiatives. That division lost $10.2 billion last year and reported revenue of $2.3 billion.
At the same time, Meta faces a stiff challenge for its high spending social media users from Tik Tok as well as having to cope with the uncertainty of an evolving digital advertising landscape.
“Although the direction is clear our path ahead is not yet clearly defined,” said Zuckerberg. “Last year was about putting a stake in the ground about where we are heading. This year is about execution.”
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