Facebook loses users for the first time ever


Facebook has reported its first ever drop in users, losing one million daily users in North America in the last quarter.

The fall from 1.93 billion users to 1.929 billion was enough to take its shares down 20 per cent – a fall of $200 billion in market value.

Globally, Facebook reported 2.91 billion monthly active users but demonstrated no growth compared with the previous three months.

The company blamed the change on Apple’s privacy changes – which Facebook and its parent company, Meta, have been fighting for months – as well as increased competition from platforms like TikTok. It also cited macroeconomic issues like supply-chain disruptions.

Apple’s “App Tracking Transparency” feature, introduced in April last year, makes it more difficult for advertisers to track people as they move between apps on their phone.

Since Facebook profits from gathering data on its users and using that to target them with ads, the new addition to Apple’s iOS 14.5 has been a point of contention between the technology giants.

The 18-year-old Facebook, which faces pressure from platforms like TikTok and YouTube, also said it expected slowing revenue growth in the coming quarter due to increased competition for users’ time and a shift of engagement toward such features as its short video offering Reels, which generate less revenue.

Meta, which has the second-largest digital ad platform in the world after Google, had previously warned its advertising business faced “significant uncertainty” in the fourth quarter.

Meta’s chief financial officer, Dave Wehner, told analysts on a conference call that the impact of Apple’s privacy changes could be “in the order of $10 billion” for 2022.

Apple’s changes to its operating software give users the choice to prevent apps from tracking their online activity for ads, making it harder for advertisers who rely on data to develop new products and know their market.

Meta forecast first-quarter revenue in the range of $27 billion to $29 billion. Analysts were expecting $30.15 billion, according to IBES data from Refinitiv.

“It’s clear that there are many big roadblocks ahead as Meta faces tough new competition for ad revenue such as TikTok, and as it contends with ongoing ad targeting and measurement challenges from Apple’s iOS changes,” said Insider Intelligence analyst Debra Aho Williamson.

The company’s total revenue, the bulk of which comes from ad sales, rose to $33.67 billion in the fourth quarter from $28.07 billion a year earlier, beating analysts’ estimates of $33.40 billion, according to IBES data from Refinitiv.

“I’m encouraged by the progress we made this past year in a number of important growth areas like Reels, commerce, and virtual reality, and we’ll continue investing in these and other key priorities in 2022 as we work towards building the metaverse,” chief executive Mark Zuckerberg said in the earnings release.

In Meta’s earnings call, he said competition for users was one factor impacting the business, mentioning short video app TikTok by name and emphasizing Meta’s commitment to providing services for young adults.

Net loss from Meta’s Reality Labs, the company’s augmented and virtual reality business, was $10.2 billion for the full year 2021, compared with a $6.6 billion loss the previous year. It was the first time the company had broken out this segment in its results.

Zuckerberg had previously warned that the company’s investment in this area would reduce 2021 operating profit by $10 billion and would not be profitable “any time in the near future.”

culled from the Independent

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