Facebook loses users for the first time, Meta stock plunges

Big area of ​​turbulence for Meta. The parent company of Facebook and Instagram saw its net profit decline – an extremely rare event – ​​by 8% in the fourth quarter compared to last year, to 10.3 billion dollars. At the same time, Facebook lost users for the first time in its history, and Meta’s pessimistic outlook for the current quarter disappointed investors. Result: its title fell by 23% during electronic trading after the closing of the New York Stock Exchange.

Ironically, these were the first results presented by Mark Zuckerberg since renaming his company and heading into the metaverse. Facebook Reality Labs, the virtual reality division at the heart of this shift, lost more than $3 billion over three months. If Meta’s turnover, at 33.67 billion dollars, is in line with its forecasts, the company is only counting on 27 to 29 billion in revenue for the current one.

Lower monetization with Reels

For several years, Facebook’s growth has stagnated in the United States and Europe. Until now, it was offset by an increase in other territories. But the slowdown seems widespread, with a drop of one million daily users, to 1.929 billion. A decline mainly due to the “rest of the world” zone (mainly Latin America and Africa), which lost three million users.

Meta warned that Apple’s ad targeting rules imposed last year could negatively impact its bottom line, and the company appears to have suffered more than Google, which reported better-than-expected results. the day before.

Meta said it has a harder time holding users’ attention because of the competition. And if Instagram manages to capture young users with Reels, short videos inspired by the TikTok application, these generate for the moment “lower remuneration rates” than the classic Instagram formats.

Expensive Metavers

At the end of October, Mark Zuckerberg announced that his company intended to focus on the metaverse, perceived in Silicon Valley as the future of the Internet. In this future that evokes science fiction, the public will use augmented reality and virtual reality glasses to find themselves, work or have fun in these parallel universes.

But building it translates to tens of billions of dollars of investment in Facebook’s Reality Labs arm so far, and it will take years to monetize the metaverse. Investor confidence is also damaged by the major failure of Diem, the digital currency project launched with great fanfare in 2019 to offer a new method of payment outside traditional banking circuits, which could have played a central role for transactions. on virtual goods.

Mark Zuckerberg insisted, according to him, these are current difficulties, which will pay off in the long term. In the meantime, if the plunge is confirmed on Thursday, the capitalization of Meta could melt by more than 175 billion dollars. And if his fortune drops by twenty billion dollars, Mark Zuckerberg could leave the top 10 of the richest people in the world.