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THIS ISSUE OF C_NCENTRATE IS FREE THANKS TO TBD CONFERENCE
META… THE BEGINNING OF THE END?
This week's big news has to be Meta (pron: Facebook) earnings. A rough one that highlights a challenging and changing competitive landscape...and what happens when people think you have the morals of Enron.
In short, Facebook (note: not WhatsApp/Instagram) had a decline in daily active users (1 million), the first time in 18 years and still managed to make +$30 billion in one quarter. Meta needs to find a new cash cow, which is the Metaverse. The issue? The tactics. Facebook just isn't great at launching anything itself. The result? The biggest drop the market has ever seen is history. Not recent history. History. Meta stock was down 26%; the company valuation dropped $240 billion, Zuck is no longer in the top 10 Billionaires. Many think this is the beginning of the end. Is it? No. Just act two. The start looks like the core is rotten or at least very ugly. I sense there will be some big changes made that we don't hear about as much as the ones we do (video push).
Why? Some say the drop is due lack of focus on creators, others the defocus on video, Facebook says TikTok, but it's all of these. Oh, and the Metaverse investment, Apple's ad stopping, looming anti-trust and lots more. In reality, Facebook made its bed, and now it has to lie in it. Meta's only real option is to go hard into the Metaverse to keep its people interested and find a big enough market to chew up.
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__ DO __ Do be careful with the 'they're toast' party line. Time will tell, but also they have a lot of levers, moves and money to make a better future for themselves. Meta are the masters of destiny if they can re-enthral users. After all, it's not like Meta aren't unaware of their issues. // __ DON'T __ Bet against the beast. While Meta is about to have another rough year. Not just because of the issues mentioned above (a few of which have yet to hit). Don’t ignore the big win/opportunity here. Namely, the good news for Meta's antirust case (it sure is easier to make the case of rough winds in Congress for Meta). Don’t ignore the slowdown though; India and other countries should still be growing. The big issue? Meta's size; the numbers are huge, skewing everything. The real issue is that a company could grow to this size unchallenged.
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