The revenue of Meta Platforms, the parent company of Facebook, WhatsApp and Instagram, fell for the first time in the second quarter of this year. At the same time, costs rose by more than a fifth, which led to a significantly lower profit for the American social media company.
Investors’ attention at the presentation of the quarterly figures tonight was mainly focused on the advertising income of Meta. Revenues from other social media companies such as Snapchat parent company Snap Inc and Twitter were disappointing. Meta was also not spared, according to the quarterly figures. The company has already braced itself for an economic downturn and announced it will significantly lower its hiring targets.
According to Meta, the decline in turnover was due to the weakening economy. Advertisers are therefore paying more attention to their expenses and advertising income is by far the most important source of income for Meta. The company expects those revenues to be even lower in the current quarter and thinks it will also be affected by the expensive dollar.
Lots of clicks for Reels
Monthly active users increased for both Facebook and Instagram, meaning more people were exposed to the ads. CEO Mark Zuckerberg stated that Reels, the short videos with which Instagram in particular fights TikTok, can count on many clicks.
Meta’s turnover in the months April to June amounted to 28.8 billion dollars or 28.2 billion euros, compared to 29.1 billion dollars (28.5 billion euros) in the same period a year earlier. At the same time, costs rose by 22 percent to 20.5 billion dollars (20.1 billion euros), partly because the workforce grew by almost a third. To cut costs, Facebook will hire fewer people.
Net profit amounted to 6.7 billion dollars (6.5 billion euros). That was 10.4 billion dollars (10.2 billion euros) a year earlier.
Leaving Europe?
Meta repeated to keep an eye on whether it remains possible to move user data from Europe to the United States. If that option is closed by the European Union, the company could consider a departure from the European market, Meta previously indicated.
In addition, it is important for investors how much money Meta invests in the metaverse. Founder Mark Zuckerberg’s dream consists of a virtual world in which people can do all kinds of business from their own home. This way they can meet each other in a virtual environment, but also play games or play sports.
The user figures are also of great importance to investors. The growth of Facebook in particular has been leveling off for some time. Meta recently tweaked the social network’s feed to attract more young users, who now prefer to be on TikTok or Snapchat.
A number of users are currently running a test on Instagram in which the feed has been adjusted so that more videos can be seen, even from people who do not necessarily follow the users. That led to a call, shared by Kim Kardashian and Kylie Jenner, among others, that Instagram should not become a kind of TikTok. Instagram boss Adam Mosseri felt obliged to respond to the controversy.
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