The stock of Facebook owner Meta Platforms Inc (FB.O) fell more than 20% late Wednesday after the social media giant issued a weaker-than-expected projection, blaming Apple’s privacy rules and more competition for users from rivals such as TikTok.
For the first time, Facebook’s worldwide daily active users fell from 1.930 billion to 1.929 billion in the third quarter.
Apple Inc.’s (AAPL.O) privacy modifications to its operating system have made it more difficult for marketers to target and measure their ads on Facebook and Instagram, according to Meta. Macroeconomic factors, such as supply-chain disruptions, were also mentioned.
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Due to improved competition for account holders’ time and a change in engagement toward functions like its Reels, which produce less revenue, the 18-year-old big company, which also experiences pressure from platforms like TikTok and YouTube, said it expects revenue development to slow in the coming quarter.
Facebook had 2.89 billion monthly active audiences in the fourth quarter, which was unaffected from the past quarter.
Alphabet Inc (GOOGL.O) shares were down roughly 2% after the company reported record quarterly sales that beat estimates on Tuesday.
Meta, which owns the world’s second-largest digital ad platform behind Google, has previously warned that the fourth quarter would bring “substantial volatility” to its advertising business.
On a conference call with analysts, Meta’s chief financial officer, Dave Wehner, said the impact of Apple’s privacy measures may be “on the range of $10 billion” in 2022.
First-quarter sales are expected to be in the $27 billion to $29 billion range, according to Meta. According to Refinitiv’s IBES statistics, analysts were anticipating $30.15 billion.
According to IBES statistics from Refinitiv, the company’s overall revenue increased to $33.67 billion in the fourth quarter from $28.07 billion a year earlier, topping analysts’ projections of $33.40 billion.
For the whole year 2021, Meta’s Reality Labs, the company’s enhanced and virtual reality division, lost $10.2 billion, compared to a $6.6 billion loss the previous year. This was the first time the corporation had separated this segment from the rest of its performance.
Zuckerberg earlier stated that the company’s investment in this area will cut net profit by $10 billion in 2021 and would therefore not be profitable “any time soon.”
In 2021, Reality Labs generated $2.3 billion in revenue. The business has kept the sales figures for its virtual reality Quest headgear under wraps.
On Wednesday, the company declared that its ticker symbol would switch to “META” this year, marking the next step in its re-branding to concentrate on the metaverse, a futuristic notion of virtual environments where users may work, socialise, and play. Meta declined to comment on the price of a contract with Roundhill Investments, which said in January that its Roundhill Ball Metaverse ETF will no longer use the ticker.
The IT behemoth, which was renamed in October to symbolize its metaverse ambitions, believes the metaverse will be the mobile internet’s successor.
Meta’s re-branding comes at a time when politicians and regulators are scrutinizing the company for alleged anti-competitive behavior and the consequences of how it handles toxic or false content on its Facebook and Instagram platforms.