Facebook’s market capitalization evaporated $200 billion after reporting business results below expectations.
Facebook’s change of name to Meta was not enough to distract investors from the perennial problem of the social media business: user decline. Not only on Facebook, but the number of Instagram and WhatsApp users also showed little change from the previous quarter.
In the North American market, where Facebook’s revenue is mainly through advertising, the social network lost up to 1 million regular users. This has generally reduced the number of global users, as confirmed by a company representative.
The decline from 1.93 billion regular users to 1.929 billion, shows that young people are increasingly indifferent to this giant platform. This is the first quarter Facebook has recorded a decrease in the number of daily people. Combined with lower-than-expected ad growth, the company’s stock fell 20%, or $200 billion in market capitalization.
Even so, Meta is still a respectable money printer: in 2021 alone, the company’s profit is $ 40 billion, mainly from advertising. But Reality Labs, the division in charge of developing Quest VR wearables, augmented reality headsets and metaverse-related initiatives, is also costing billions of dollars.
Last year, the division lost $10.2 billion on revenue of $2.3 billion, which includes sales of Quest VR wearables and related software applications. Meta has not revealed the specific number of devices sold, but a third party estimates the number to be around 10 million units. During a financial statement conference with investors on February 2, Zuckerberg confirmed that Meta’s next VR device will be released later this year, at a price point in the high-end segment.
The Facebook CEO also said that the company will continue to increase spending on Reality Labs in the coming years, seeing the combination of AR and VR as the next big computing platform.
Vinh Ngo (According to The Verge)
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