(San Francisco) Meta (Facebook, Instagram, WhatsApp) saw its annual revenue decline to $116.61 billion in 2022, down 1% from 2021, the first decline in annual revenue since that the social media giant went public in 2012.
But its title jumped 18% during electronic trading after the close of trading on Wednesday, because the market expected a more brutal fall for the Californian group which has been sailing on sight for a year, facing competition from TikTok and economic crisis.
Another positive sign, Facebook has reached two billion daily active users, against 1.98 billion at the end of September, according to its results release. In all, some 3.74 billion people use at least one of the company’s services (social networks and messaging) every month.
But these good surprises do not hide the reality of a company that has seen better days.
In the fourth quarter of 2022, Meta achieved a turnover of 32.17 billion dollars (-4% over one year), and saw its net profit halved to 4.65 billion, instead of the 6 billion expected by the analysts.
The company has been worrying the markets for a year, when the group first lost users on Facebook. It was shortly after its name change and the announcement of its pivot to the metaverse, this parallel universe, accessible in particular via augmented and virtual realities, presented as the future of the internet.
Reality Labs, the branch responsible for developing the metaverse, widened its losses to 4.3 billion dollars during the past quarter, after having already lost 3.7 billion in the third quarter, and 2.6 in the second.
Mark Zuckerberg, the group’s boss, “is going to have to accept the sad reality: companies and consumers have no appetite for virtual worlds at the moment”, commented Debra Aho Williamson of Insider Intelligence.
“Bitter Pill”
Like its neighbors Google or Snap, Meta is suffering both from the success of TikTok, from shrinking advertiser budgets due to the economic crisis, and from Apple’s regulatory changes, which are limiting the ability of social networks to collect data. users to sell ultra-targeted ads.
Many large companies rolled out sweeping social plans in the fall, but the tech industry, and especially the big platforms, hadn’t often had to take these kinds of measures until now.
In November, boss Mark Zuckerberg announced that Meta would cut 11,000 positions, or about 13% of its workforce, chosen across all divisions from networks to messaging at Reality Labs. And hiring is frozen until the end of March 2023.
“2022 has been a disastrous year for Meta with layoffs, poor economic conditions, fierce competition from other platforms like TikTok and criticism of its ambitions for the metaverse,” summarized Debra Aho Williamson.
A return to growth in advertising revenue in 2023 requires, according to the analyst, that the group focus on its core business, the social networks Facebook and Instagram. But that means Meta is forsaking her beloved metaverse a bit — “a bitter pill for Mark Zuckerberg,” she notes.
She predicts that even if the world’s number two in digital advertising (behind Google) raises the bar in 2023, its market share will decline this year, after reaching 22% in 2021.