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Meta: declining profits and fewer users on Facebook

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As of December 31, 2021, 2.8 billion people visited one of its four services (Facebook, Instagram, Messenger and WhatsApp) at least once a day and 3.6 billion at least once a month.

Figures up slightly over one year, but almost equivalent to those of the third quarter.

The original social network, Facebook, has lost about 1 million active daily users in three months (1.929 billion at the end of December).

Dave Weiner, the group’s chief financial officer, cited an unfavorable comparison with previous months, when the resurgence of COVID in Asia would have accelerated the adoption of the service.

We also believe that competing platforms are hurting our growth, especially with younger audienceshe said during a conference call for analysts.

People have a lot of choices about how they want to spend their time. And apps like TikTok are growing really fast. »

A quote from Mark Zuckerberg, the founder and boss of Meta

Company executives have repeatedly raised competition from TikTok, but also from other networks, as they face numerous investigations and complaints for abuse of dominance.

On the finance side, Meta posted revenue of $33.67 billion, in line with its forecast, but it didn’t generate any. than 10.3 billion dollars of net profit in the fourth quarter, 8% less than last year.

Its title fell more than 22% during electronic trading after the closing of the New York Stock Exchange on Wednesday.

A blurred young man is holding a smart phone displaying the TikTok logo.

TikTok is one of the main rivals of the platforms that Meta owns. Facebook and Instagram now offer videos in a format similar to what exists on TikTok.

Photo: afp via getty images / LOIC VENANCE

As an explanation for this disappointing performance, Meta cited the competition and supply chain difficulties suffered by its clients, the advertisers.

The Californian group also noted that its users spent more time on the Reelsa short video format inspired by the TikTok application which generates lower rates of pay than the classic Instagram formats.

Above all, he had warned that the rules imposed by Apple last year in terms of advertising targeting could have negative consequences on its results.

The Apple brand requires app publishers to request permission to collect data, much to the chagrin of companies like Meta whose business model is based on selling personalized ads based on consumer tastes.

This ethical and technical change interferes with Meta’s ability to assess the performance of advertising campaignssaid Debra Aho Williamson, analyst for eMarketer.

2021 and start2022, to test alternative digital channels.”,”text”:”We estimate that some advertisers began to partially withdraw from Meta in late 2021 and early 2022, to test alternative digital channels.”}}”>We estimate that some advertisers began to partially withdraw from Meta in late 2021 and early 2022, to test alternative digital channels.

These are the first results that the American group has published since changing its name at the end of October.

Tens of billions of dollars of investments

Mark Zuckerberg then announced that he wanted to focus on the metaverseconsidered in Silicon Valley as the future of the Internet: a parallel universe where the public will use augmented or virtual reality glasses to interact, work or be entertained.

Its construction has so far translated into tens of billions of dollars of investment in the Facebook Reality Labs branch.

A man participates in a virtual reality exercise.

Meta, and other tech companies, are betting heavily on virtual reality (archives).

Photo: /TurnedNews.com / Yvon Theriault

Adam Mosseri, the boss of Instagram, announced on Wednesday that users can now create their avatar, intended to serve as an identity in the metaverse.

It’s a virtual representation of who you are, more dynamic than a profile. You will have clothes that you can wear […] and also money, and any digital asset you ownhe said in a video.

The goal is for people to be able to take this identity and these goods wherever they go in the metaverse, on the apps made by Meta or by any company in the worldhe added.

There is a lot of uncertainty around these investmentsMs. Williamson noted.

Meta will no doubt be experimenting with ads and e-commerce in its metaverse apps this year, but these efforts will be very experimental and unlikely to yield much revenue in the near term.

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.

The independent entity that took care of it announced on Monday that it was going to dismantle for lack of having been able to convince the regulators.

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