Twenty years old and healthier than ever. Officially founded on February 4, 2004 by Mark Zuckerberg, himself 20 years old at the time, The Facebook, as it was then called, only needed two decades to change the world. The question today is therefore what awaits him for the next 20 years…
Everyone and their neighbor has an opinion about social media in general, and Facebook in particular. It is associated with disinformation and division, with the rebirth of extremism. Its immediacy and virality would favor flashiness rather than in-depth reflection and critical thinking. We have even already announced the end of Facebook, a network for old Internet users, it was said. Its income depends on sometimes questionable content and fake accounts abound. The company looks like a worn-out monopoly that copies and innovates very little.
However, Facebook is on fire. In 2023, its users who visited the site every month were more numerous than in 2022. Those who visited it every day were also more active. Their time spent on the platform has increased. Reels, the new video inspired by TikTok, is both a popular success – they are eaten like potato chips – and a financial success. And it’s only just started.
“It’s clear that Facebook has become a mature platform,” explains Aaron Lanni, portfolio manager and partner at GPS Medici. “But we do not detect a slowdown, even after 20 years. »
The financial results for the fourth quarter of its 2023 financial year, published Thursday evening, point in this direction. His income is increasing; its benefit is just as much. Its stock jumped another 12% in after-hours trading. Meta itself predicts that the start of 2024 will be even hotter than 2023.
From Facebook to Meta
Today, Facebook is powered by artificial intelligence (AI). Its posts, news feed, Marketplace and advertising platform are guided by algorithms that are improved every day thanks to their use by thousands of other businesses. It’s not for nothing that Meta offers it to anyone who wants to use it: it benefits them…
It also changed Facebook. It’s no longer the site we visit to reconnect with long-lost friends and colleagues. “It goes against what Facebook used to be. We seem to be moving towards a more passive consumption of video content,” notes Mr. Lanni. But it works. The current upturn began in November 2022. After a year-long stock market fall, time for boss Mark Zuckerberg to launch into the metaverse, then to change his mind and reorient his strategy towards video and AI. Since then, Meta’s stock has tripled in value.
Meta’s capitalization is today at an all-time high. It has crossed the symbolic threshold of 1000 billion US dollars, and analysts are even more optimistic for the future.
The key is simple: Meta is not just Facebook. Combined, Facebook, Instagram, WhatsApp and Threads, the newcomer trying to occupy the space left vacant by the transformation of Twitter into X, are on the rise. The four platforms act as so many communicating vessels for short video content that creates a real dependence, consumed frenziedly each month by more than three billion Internet users.
These four networks complement each other. Instagram attracts a younger clientele than Facebook. WhatsApp – and somewhat, in part, Messenger – is of interest to those who prefer to chat privately. Threads is still looking for its niche, but seems to want to take the one formerly occupied by Twitter.
An advertising giant
This model makes it possible to display advertisements that advertisers are increasingly entrusting to Meta. Because the digital advertising market has weathered the pandemic well. And in recent months, despite inflation and macroeconomic uncertainty, advertising on social networks has grown by 3.4%.
In 2024, the value of this market is expected to grow further – by 10.4%, according to the American specialist firm Insider Intelligence. Between 2017 and 2021, the share of social networks in the advertising market in the United States increased from 10.5% to 20%, calculates the New York firm, which predicts that this growth will continue at least until 2027 .
“The share of advertising that goes to social media will continue to grow, in part because traditional advertising is growing less quickly or is in decline,” writes Insider Intelligence, for whom the key to success for Meta is precisely to recover the dollars advertising lost by traditional media. Mark Zuckerberg’s firm risks reaping the lion’s share of these new dollars, analysts estimate. Because its main rival, TikTok, seems to have lost some of its momentum.
In this context, a smart person is anyone who could predict what Facebook and Meta will look like in 20 years. But one thing seems certain: there will still be a Facebook in 20 years. “Zuck is not so much an innovator. Its success in the next 20 years will depend less on its ability to innovate than on its adaptation to what will appear new,” concludes Aaron Lanni.