Facebook’s parent company, Meta, reported a 23% drop in profits during the first quarter compared to a year ago. As Mark Zuckerberg’s social media empire, the company’s metaverse division, continues to burn through money.
in the first trimester The social media giant made $5.7 billion in profit, down 23% compared to $7.4 billion last year. First-quarter revenue was $28.6 billion. That’s a slight increase compared to last year’s $27.9 billion. and $27.7 billion higher than expected for the quarter.
Zuckerberg said the business “had a good quarter and the community continued to grow,” adding that the focus on AI in every app is driving expected results.
Previously, the company’s image was largely focused on driving the metaverse since its 2021 rebrand, with Meta making most of its money from advertising revenue. totaling $28 billion in the quarter. That compares with only $205 million in revenue from other sources, but the latest advertising revenue figure is up compared to $27 billion a year ago.
After a $14 billion loss on metaverse-focused Reality Labs last year, Zuckerberg announced that 2023 will be the “Metaverse Performance Year” as the social media giant strives to navigate a challenging and defensive business environment. Competition from rival platforms like TikTok
However, Reality Labs still lost a lot of money, losing $3.9 billion during the first quarter. That’s a sharp increase compared to a loss of $2.9 billion in the same period last year.
The company had laid off 11,000 workers last November. And announced last month that it would lay off 10,000 more workers. This is because the company is restructuring and canceling low priority projects.
Zuckerberg maintains that the metaverse remains “central in shaping the future of social connections,” but that it will also lean towards AI following the success of OpenAI’s ChatGBT.
However, it’s worth noting that during Zuckerberg’s opening speech, he mentions the metaverse only 8 times compared to 20 references to AI.
“We’ve been focusing on both AI and the metaverse for years, and we’ll continue to focus on both,” Zuckerberg said.
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