This Thursday morning, Mark Zuckerberg, boss of the Meta group (which includes Facebook, Instagram and WhatsApp), had to wake up with a hell of a hangover. Because the figures for the last quarter of 2021 from the digital giant are enough to dampen the morale of its leader. Meta’s net profit fell – a rare event – by 8% in the fourth quarter compared to last year, to $10.3 billion. The social network Facebook has lost users for the first time in its history, after 18 years of existence. And because misfortunes always come in droves, the action of Meta collapsed by more than 25% this Thursday on the Wall Street stock exchange. From $320 before the close, the stock was trading below $240 by midday
An evening that everyone will agree to describe as at least “well rotten” for the blue network. But according to Asma Mhalla, lecturer at Sciences Po Paris on the political issues of the digital economy and specialist in Gafa, the poor results of Facebook – the spearhead of Meta – are not very surprising: “It’s for at least two years that we have seen a stagnation in the number of users on Facebook, it was certain that it was going to end up losing members. »
And the boomers invaded Facebook
Worse still, the remaining users are getting older and older. And that, for a social network, is the drama: “The real target is young people. It’s more profitable for data, advertising, advertisers. The younger your users are, the more time you have to target their profile and their taste throughout their life and the more your ads will work on them. Young people were also at the base, the heart of Facebook, initially designed for students, ”informs our expert. In 2021,
36% of Facebook users were over 35, compared to 25% of 18-24 year olds and 32% of 25-34 year olds. In comparison,
Instagram has 31% of 18-24 year olds and only 30% of people over 35 years old. In minors, it is
TikTok that reigns over the playgrounds. People under the age of 18 represent only 8% of Facebook users worldwide, while
38% of Tiktokers are between 13 and 17 years old (and 37% are between 18 and 24 years old, or three quarters of users between 13 and 24 years old).
No time to beat around the bush for Asma Mhalla: “Facebook is becoming a network of old people, used more by parents and grandparents than by children”. The opportunity to drive the point home: “These age groups scare away young people, who seek blank spaces from their elders to talk to each other. This is where the drop in Facebook users comes from: when young people no longer come to swell the workforce, you are doomed to lose people sooner or later. »
Don’t sell the bear pelt until you’ve poked it
Let Mark Zuckerberg console himself a little, Facebook is not dead for all that and even less Meta. “The results are much less catastrophic than the stock market reaction suggests”, strongly nuances Julien Pillot, economist and teacher-researcher at Inseec Business School. A net profit that declines is still a profit. As for the users lost by Facebook, after 18 years of continuous growth, it was inevitable, relativizes the teacher: “All ascents have a limit, especially with so many new competitors like TikTok which drain part of the public. “Facebook is even resisting rather well, since it has only lost a million people in one quarter out of a total of… 1.930 billion members. “Obviously, the trend is bad and this loss of users calls for other, more substantial ones. But from there to burying Facebook or losing 20% on the stock market as was the case, there is overreaction, ”defends Julien Pillot.
And because it’s important not to feel alone when you’re going badly, Facebook does not have a monopoly on the fall in the stock market, which rather represents a fundamental trend in the tech world in 2022. month, the action of Amazon fell by – 17.15%, that of Telsa by – 24.74%. and that of Netflix by – 29.36%. General rout which is explained “by the peaks of valuation obtained in 2020 and 2021 with the health crisis. Investors know that the trees do not reach to the sky, that the rating will go down sooner or later and that it is time to reap profits”, according to the economist. Understand: it sells shares en masse, which drives down values. The stock market has this particularity of mimicry: the more it falls, the more sales it will lead to, the more it will fall again.
Meta is certainly going through a bad patch, and is counting on the Metaverse to relaunch itself in the race for record profits and young people, a lost and essential target to stay in the lead wagon. “It’s a long-term project, which is struggling to show results for the moment, but no company lives in the present moment and all seek to conquer the young people of the future”, specifies Asma Mhalla. It remains to be seen if tomorrow will still belong to Mark Zuckerberg, and if his awakenings will be more peaceful than this morning.