TECH

Meta Platforms, which owns Facebook, Instagram and WhatsApp, reported a decline in revenue for the first time in its history

Serious problems in the digital advertising market and user preferences have contributed to the negative dynamics: competition from TikTok continues to intensify.

Meta's revenue for the last quarter was $28.8 billion, nearly 1% less than the same period last year and below Wall Street analysts' forecast of $28.9 billion. The company's net income for the reporting period was $6.7 billion, and this is the third straight quarter, the biggest decline the social media giant has experienced since 2012. There was also good news: Facebook, the company's main asset Meta, grew its user base from 1.96 billion daily active users on the platform three months ago and has now grown to 1.97 billion.

The root of Meta's financial failure appears to be weak demand for advertising, with its average ad price dropping 14% in just one quarter, up from a year earlier, reporting a 47% year-over-year increase. Outgoing COO Sheryl Sandberg said Meta is already preparing new solutions in response to toughening privacy policies on Apple's mobile platforms. The company also said spending for 2022 will be between $85 billion and $88 billion, having previously reported a range of $87 billion to $92 billion.

To increase user engagement, Meta has stepped up AI-based recommendation algorithms on its platforms to counter TikTok's growing popularity. Algorithms already display every sixth post in users' Facebook and Instagram feeds, and by the end of 2023, every third post will be recommended. Meta CEO Mark Zuckerberg also said that in the last quarter, users started spending 30% more time on the short video sections of Reels – TikTok clones. He also added that Reels' advertising revenue is already approaching the $1 billion mark in annual terms.

Finally, the Reality Labs division, responsible for the development and launch of equipment, including virtual reality devices, showed a positive result: its quarterly revenue was US$ 452 million, exceeding analysts' expectations of US$ 431 million.

AVnews