The descent into hell continues. Falling revenues, halved net profit, stagnation in the number of users: Meta, (Facebook, Instagram, WhatsApp) is going through a bad patch, but its boss Mark Zuckerberg is sticking to his Grail: building the metaverse. Mdespite the indifference of the public and the doubts of Wall Street.
The Californian group saw its net profit melt to 4.4 billion dollars in the third quarter (-52% over one year) and its turnover fell by 4%, to 27.7 billion dollars.
Meta plunged nearly 20% after the earnings release in electronic trading after the New York Stock Exchange closed. In just over a year, the company has lost almost three quarters of its value. If the stock opens at $104 in the morning, Meta will be worth only $280 billion, a level not seen since 2016.
“increased competition”
Like Google (Alphabet), Meta is suffering from inflation and rising interest rates, which lead many advertisers to scale back their marketing budgets. “We are facing an unstable macro-economic environment, increased competition, advertising targeting issues and increased costs for our long-term investments, but I must say that our products seem to be doing better than some comments. do not suggest it, ”attempted to temper Mark Zuckerberg on Wednesday during the analyst conference.
Apple’s new rules, which require apps to ask users’ permission to track them and send them ads, have also made things much harder for Facebook and Instagram.
The social media giant “is standing on shaky legs,” responded Debra Aho Williamson, 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 current reality.”
In all, some 3.71 billion people use at least one of the company’s services (social networks and messaging) every month, only 1.6% more than before the summer.
Metaverse Colossal Losses
The group has little recourse against the global economic context or its powerful neighbor at the apple, but Mark Zuckerberg welcomed the progress of “reels”, a format of short videos copied from the very 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 spent time market share (on our apps) from competitors like TikTok.”
The Reality Labs branch, responsible for virtual and augmented reality platforms and equipment, widened its losses from $2.6 billion to $3.7 billion in the third quarter. And it should not work out in 2023.