GET META SOON
Meta reported revenue was down 1% Year over year this week. The poor lambs only managed to make $28.8B with 2.88b users using 'the family' (still creepy) of apps while the world burns. Investors, media and analysts are saying this is the start of the end, and in some respects, they are correct; this is the first time Facebook has reported a drop in revenue, and things need to change. When situations like this arise, as they have with Myspace, Friendster etc., you have to think the line could continue, it could accelerate, but it's unlikely to be linear and none of the companies that came before it had billions in their back pocket.
Many this week also ragged on Instagram/Facebook for copying, backtracking and generally being directionless, following a path to become TikTok. These are fair arguments for both companies. Facebook does appear to be good at making money, copying features badly, but without a plan that doesn't involve the word 'metaverse' (the division that lost Meta $2.8b this quarter...QUARTER), which everyone, unless you're in gaming, is now pretty clear won't be here within 10 years.
The numbers spell a 36% profit drop for the big blue misery machine. Bigger forces are at work in the world that makes Facebook, and other social media platforms, less thrilling right now. People have less time, money, and patience to see the filter-perfect worlds they dream of that is out of reach. Gen Z isn't all that bothered about social media compared to previous generations, people are going out more, the realities of rising inflation, macroeconomic uncertainties, the doomscrolling, and the lack of 'this is what I want to see'-ness are all playing a role. None of these trends are good news for Meta and pals, but let no one tell you that Facebook isn't being used daily active users are up 3%, and other 'family' (still creepy) are up 4% YoY.
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__ DO __ Panic, though. Meta has announced a new chief strategy and chief financial officer for Meta (the timing is telling). Neither name has set the world on fire as a 'they can fix it' person. Both have a job on their hands if they want to reverse the roughly 50% stock decline since January. It's not all down to Apple's iOS privacy upgrade, but the ad world and shareholders are clearly spooked. Q3 revenue projections were weaker than Wall Street was hoping for too. Add to this the FTC putting an injunction in front of the purchase of a VR company, and a cloudy horizon looms for the good ship Facebook.
// __ DON'T __ Ignore the push to Reels. This move by Facebook will have significant consequences for a lot of brands. Video isn't cheap or easy. It also means that regular user content is being devalued. There really is no utility to post anything anymore. We've gone from sharing and consuming to consumer highly-followed and brand rubbish. The junk food diet is killing Facebook. The company could do a lot worse than focus on customer trust and the right mix of content that has actual utility. Politics and divisive content may be sticky, but it's rotting the platform from the inside out.
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