Facebook is losing users for the first time since its creation

Yesterday evening, February 2, 2022, was historic in its own way: Facebook (now Half) published the financial results of thelast quarter of 2021 and the whole of last year, highlighting for the first time since its creation, a loss of users daily on a global scale. This without forgetting other data of a certain weight: one growth of advertising revenue below expectations which caused the stock to plummet by 20 percent.

The problems of Facebook (Meta)

This collapse – in which Meta also dragged other giants in the sector such as Twitter, Snap and Pinterest -, which saw the value of Facebook drop by 200 million dollars, is proof of how the operation transformation into Meta was not enough to distract investors from the problems facing Facebook in relation to its core business, which is social media.

In the last quarter of last year the growth of the user base of Facebook, Instagram and WhatsApp was basically flat. In addition to this, just the main Facebook application lost a million daily users in North America, which is where it usually generates the bulk of its revenue through advertising. That drop translated into a general decrease in Facebook daily users globally, which a spokesperson confirmed was a first in the company’s history.

The move from 1 billion and 930 million in Q3 2021 to 1 billion and 929 million in Q4 could represent a consequence of the decline in interest against Facebook by the new generations, that they prefer other platforms.

Facebook’s situation hasn’t dented Instagram’s numbers, but overall all of Meta’s apps have pulled together 2.82 billion users, just 10 million more than in the previous quarter.

The profits are still substantial

Half, this must be said, however, it remains extremely profitable: last year alone it made profits for almost 40 billion dollars, most of which come from advertising.

However, many billions of dollars are running out in Reality Labs, that is to say the division that deals with Quest VR headsets, VR software, glasses AR incoming and other initiatives having to do with the metaverse. This division alone, in fact, last year reported losses of 10.2 billion dollars and generated revenues of about 2.3 billion dollars, a figure which includes both the sales of Quest headsets and the purchases in VR app. To tell the truth, Meta has not yet disclosed the sales figures of the Quest viewers, even if third-party estimates speak of numbers that are around ten million units.

Speaking to investors on Wednesday, Mark Zuckerberg reported that the next headset for the VR produced by Meta – the talked about but still unknown Project Cambria – will arrive on the market later in the year and will be positioned in a premium price range (“high end of the price spectrum“).

Zuckerberg himself was very clear on his intentions for the future: in the years to come there will still be large investments in Reality Labs, with the vision that intends the combination of augmented reality And virtual reality as the next big computing platform.

However, what has been said makes the potential big flaw in the ambitious plan of the Facebook founder quite evident: it should be the social media business – whose growth, as we have seen, is slowing down – to finance the necessary investments.

From this point of view, the interpretation offered is very interesting Nikita Bier on Twitter:

  • Facebook is suffering enormously from competition from TikTok
  • It cannot make new acquisitions without ending up in the antitrust crosshairs
  • Apple’s IDFA issue affected advertisements (ie target ads)
  • The metaverse is overdue.

Bier, however, would not bet against Zuckerberg in the long run.

Read also: Meta closes in the field of cryptocurrencies: the farewell to Diem is now official

Leave a Comment