Facebook: Meta’s apps family continued to record modest user growth, with the Facebook app’s parent company Meta seeing user growth falling for the first time since its inception. In addition, Facebook-backed digital currency project Diem was shut down and its assets sold to a bank, dealing a major blow to the company’s vertical integration ambitions in the proposed metaverse.
Facebook’s decline, and why it happened
In the October-December quarter, Facebook’s daily active users declined to 1.929 billion from 1.930 billion during July-September. This loss was mainly due to declining contributions from Africa and Latin America. Overall, the company reported earnings of $33.67 billion during the three-month period, compared to $28.07 billion in the same period last year.
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According to reports, Meta reported a weaker-than-expected forecast, blaming Apple’s privacy changes and increasing competition for users from rivals such as TikTok.
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What else did Meta announce?
For the first time ever, Meta began reporting its financial results in two parts – the Facebook family of apps that includes Facebook, Instagram, Messenger, WhatsApp and other services. Apart from this, Reality Labs, which has consumer hardware, software and content related to augmented and virtual reality. Of its total revenue of $33.67 billion, the Reality Labs segment contributed only $877 million, which puts the company a long way ahead of its Metaverse aspirations in pivoting.
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What does this mean, and how has the market reacted?
The drop in the number of users logging into Facebook each day is a sign of the company’s man-product saturation in global markets, indicating that it may no longer be able to expand its user base. Meta shares fell 20 percent late Wednesday (US time), wiping out nearly $200 billion of its market value.