Facebook’s decade-long streak of uninterrupted revenue growth has come to an end. The social network has reported its first annual decline in revenue, down 1% to $28.8 billion, and predicted that growth in the third quarter could fall further. The global profit of its parent company, Meta, fell 36% to 6.7 billion dollars. The Reality Labs division, Responsible for building Mark Zuckerberg’s metaverse, lost $2.8 billion in the quarter.
Facebook had already prepared its investors long ago. A few months ago its leader declared that the metaverse will make the company lose money for five more years.
Another of its great obstacles to growth is Apple. The company even tripled its advertising revenue in six months after putting obstacles in the way of the competition. Specifically, from Apple’s software update, iOS 14.5, has been banned from apps and advertisers collect data about iPhone users without their explicit consent.
This translates to if a user refuses to be tracked, many companies, such as Facebook, Snap, Yahoo, Twitter or Google who base their advertising on this information, have been left without valuable information for their mobile advertising business. According to data released now, this has cost Meta $10 billion in ad revenue over the past year alone. And now the rapidly slowing economy has caused advertisers to cut back on spending.
Meanwhile, in its effort to compete with TikTok, Meta is redesigning Facebook and Instagram to put an emphasis on short videos and the posts your system recommends to people.
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More Facebook users
Even though Meta’s revenue is declining, it has seen daily Facebook users grow by 3%. There are now 1.97 billion users globally. Meta reported that 2.88 billion now use its suite of social apps – Facebook, Messenger, Instagram and WhatsApp – every day, an increase of 4 percent from a year ago.
Zuckerberg has said that Reels, the company’s short-form video format targeting TikTok, is monetizing faster than Stories after the company copied that format from Snapchat several years ago.