Quarterly figures
Facebook group Meta is worried about the economy
Meta spends a lot of money on developing virtual worlds. photo
© Rafael Henrique/SOPA Images via ZUMA Press Wire/dpa
The advertising business of the Facebook group Meta was in full swing in the last quarter. But now there are signs of a slowdown. They say it started the Gaza war.
In the last quarter, Meta’s advertising business was still running at full speed. This gives founder and boss Mark Zuckerberg more freedom to continue investing billions in the development of virtual worlds without investors getting upset.
Quarterly sales increase by 23 percent
Quarterly sales rose by 23 percent year-on-year to $34.1 billion (32.3 billion euros) in the last quarter, as Meta announced after the US stock market closed on Wednesday. Profit jumped to $11.6 billion from $4.4 billion a year ago.
The group continues to spend a lot of money on the development of virtual worlds – the “Metaverse” – and the devices intended for this purpose, such as digital glasses. The Reality Labs division’s operating loss rose to $3.74 billion from $3.67 billion a year earlier. At the same time, sales fell from $285 to $210 million.
Since the beginning of the year, Reality Labs has accumulated an operating loss of $11.5 billion. Apps like Facebook and Instagram earned $41.8 billion during this time.
Concern about continued high investments
Investors had repeatedly expressed concern that Meta was spending too much money on a technology with uncertain profit prospects. The doubts grew stronger in the last quarter as the overall online advertising business slowed. Zuckerberg had already confirmed back then that he saw the future in the “Metaverse” and would therefore keep investments high.
Zuckerberg announced that the priority for investments in the coming year will be artificial intelligence, both in software development and in computer resources. He reiterated that AI features would change the way Metas apps are used. The group is experimenting, among other things, with chatbots and software that creates images on the fly based on descriptions.
Threads with almost 100 million users
Meanwhile, Meta’s Twitter alternative Threads appears to be doing better than recent estimates from web analysis companies suggested. Threads currently has almost 100 million active users at least once a month, said Zuckerberg. However, he did not mention the number of daily users. After its launch in July, Threads cracked the 100 million registration mark within a few days – but after that, user activity declined again. Zuckerberg was further convinced that Threads could become a service with a billion users in a few years.
Instagram boss Adam Mosseri announced that Threads could finally become available in the EU in a few months. Meta sees legal uncertainty surrounding the new digital laws in the European Union and is hesitant, citing this.
In an initial reaction to the quarterly figures, the share price initially rose, but after comments on the unclear advertising situation, it turned negative and lost 3.35 percent in after-hours trading. Meta gave its sales forecast for the current quarter an unusually broad range of $36.5 billion to $40 billion.