Meta, the parent company of Facebook and Instagram, saw its net profit fade to $4.4bn in the third quarter (-52% year-on-year), as the social media giant grapples with stagnant user numbers already. advertising clippings. budgets
The title of the Californian group lost this Wednesday more than 11% on Wall Street during electronic trading after the closing of the Stock Exchange, although its turnover stood at 27,700 million dollars, (-4%), according to the expectations of the market.
“Short-Term Revenue Challenges”
Meta boss Mark Zuckerberg, quoted in the earnings release, admitted to facing “short-term revenue challenges” but said the foundations were “in place for a return to stronger growth.” The company said its global workforce (87,000 as of September 30) would not change by the end of next year.
“Some teams will not change size, others will shrink and we will grow only those that work on our highest priorities,” the group detailed. A year ago, Facebook became Meta and projected itself into a glorious future where its users could find themselves in the metaverse, a parallel universe described as the future of the Internet.
But “Meta in 2022 has little to do with Facebook a year ago. Many aspects of its business are upside down and its short-term outlook is not rosy,” said analyst Debra Aho Williamson of Inside Intelligence. The company has been worrying markets since the beginning of the year, when the group first announced that it had lost users on its original social network, Facebook. In total, some 3,710 million people use at least one of the company’s services (social networks and messaging) every month, 4% more than a year ago.
Apple and Tik Tok
Like Google (alphabet), Meta suffers from inflation and rising interest rates, leading many advertisers to cut their marketing budgets. In the third quarter, the online search giant posted the weakest revenue growth since 2013, apart from the start of the pandemic. Apple’s new rules, which require apps to ask users for permission to track them and serve them ads, have also made things much more difficult for Facebook and Instagram.
On Monday, the iPhone manufacturer also announced that purchases of “boosts”, these tools that allow content to be promoted on social networks, would be considered expenses in the application, in the same way as purchases of bonuses in video games, for example. . But Apple takes a commission of 30% of these expenses in the apps. Meta will therefore lose part of its advertising revenue on Facebook and Instagram.
“Apple continues to evolve its regulations to grow its own business while undermining others in the digital economy,” a Meta spokesperson said on Wednesday. “Apple had said in the past that it would not take some of the ad revenue from app publishers, but they have apparently changed their minds.”
From YouTube to Snapchat, the major platforms are also suffering from the success of the wildly popular TikTok, “but this is not the main source of difficulty for Meta,” estimates Debra Aho Williamson. “Even if some advertisers shift some of their budgets to (this app), it probably won’t represent a significant portion of the group’s total ad revenue.” Meta is expected to earn more than $129 billion from advertising this year, or a 21.4% global market share, according to Insider Intelligence.
“In the long term, Meta must solve three major problems,” elaborates the analyst. “The company is no longer at the forefront of innovation, its grip on the market is weakening, and the promise of the metaverse, at the heart of Mark Zuckerberg’s vision for the future of his company, is facing consumer apathy.” , professional skepticism and the realities of a declining global economy”.
Source: BFM TV
