Facebook is losing users for the first time ever and shares in Meta have fallen off a cliff
obliterated more than $230 billion in market value and triggered Wall Street’s worst drop in close to a year.
It wasn’t just Facebook colliding with a brick wall in user growth. Like a horror movie killing off victims one by one, the hits kept coming when Meta reported earnings Wednesday.
Facebook said Apple changes that made it harder for apps to track iPhone users would cost about $10 billion in advertising revenue this year.
CEO Mark Zuckerberg said Facebook was struggling to compete with short-video app TikTok.
The company’s expenses were skyrocketing as it poured $10 billion in augmented and virtual reality hardware to build its “metaverse.”
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But perhaps most unsettling to some was the revelation that Facebook, for years a hot-rod gstock, had experienced its first-ever decline in daily active users.
For the fourth quarter, Facebook had 1.929 billion daily active users compared to 1.93 billion in the previous quarter, suggesting that the company whose user growth has stalled in North America and Europe for some time has run out of users to add in the rest of the world.
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“People have a lot of choices for how they want to spend their time and apps like TikTok are growing very quickly,” Zuckerberg said in prepared remarks Wednesday.
Meta is investing more into short-form videos to better compete with TikTok, including Reels, which the company launched on Instagram in 2020.
Facebook’s chief financial officer David Wehner also blamed an increase in internet data prices in India, its largest market, for the dip in daily active users.
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Follow Brett Molina on Twitter: @brettmolina23.