Facebook’s parent company Meta said on Wednesday its revenue fell for a second straight quarter, hit by falling ad sales as it faced competition from popular video app TikTok.
The quarter’s weak results raised new questions about whether Meta’s plans to spend US$10 billion a year on the Metaverse – a concept that doesn’t quite exist yet and may not. ever – are cautious as his main source of income wanes.
Meta Platforms Inc.’s quarterly results sent its stock tumbling more than 20% to just above $100, a level it hasn’t fallen since 2016. Before the latest selloff, it was already down 61% for the year. .
The Menlo Park, Calif., company earned $4.4 billion, or $1.64 per share, in the three months ended Sept. 30. Analysts had expected earnings of $1.90 per share, on average, according to FactSet.
Revenue fell 4% from $29.01 billion to $27.71 billion.
Some of the company’s investors are worried that Meta is spending too much money and confusing people by focusing on the Metaverse, a concept of virtual, mixed and augmented reality that few people understand – while it’s also grappling with declining advertising activity.
“Meta has drifted into the land of excess – too many people, too many ideas, too little urgency,” Brad Gerstner, CEO of Meta shareholder Altimeter Capital, wrote earlier this week in a letter to Meta CEO Mark Zuckerberg. “That lack of focus and fitness is obscured when growth is easy but deadly when growth slows and technology changes.”
In addition to an accelerating revenue decline, Meta also forecast weaker-than-expected sales for the current quarter, raising concerns that the revenue slump is more of a trend than an aberration.
“While we face near-term revenue challenges, the fundamentals are there for a return to stronger revenue growth,” Zuckerberg said in a statement. “We approach 2023 with a focus on prioritization and efficiency that will help us navigate the current environment and emerge an even stronger business.”
From August 3:
front burner24:02As Meta struggles, Zuckerberg puts employees under fire
Meta said it expects staffing levels to remain about the same as in the current quarter. The company had approximately 87,000 employees as of September 30, a year-over-year increase of 28%.
“To return to stronger growth, Meta needs to turn around its business,” said Debra Aho Williamson, analyst at Insider Intelligence. “As Facebook Inc., it was a groundbreaking company that changed the way people communicate and the way marketers interact with consumers. Today, it’s no longer that innovative pioneer.”
She went on to say that “Meta would benefit from less focus on the metaverse and more on fixing its core business.”
Meta’s Reality Labs unit, which includes its metaverse and virtual reality efforts, posted an operating loss of $3.67 billion in the third quarter, compared with a loss of $2.63 billion a year earlier. early. Its turnover was 285 million dollars.
Despite falling revenue, around 3.71 billion people logged into at least one of Meta’s app families – Facebook, Instagram, WhatsApp or Messenger – up 4% year-on-year.
Facebook breaks election transparency law again
In a separate development on Wednesday, a Washington state judge on Wednesday fined Meta $25 million for repeatedly and intentionally violating campaign finance disclosure law, in what would be the most largest campaign finance sanction in US history.
The sentence handed down by King County Superior Court Judge Douglass North was the maximum allowed for more than 800 violations of Washington’s Fair Campaign Practices Act. Attorney General Bob Ferguson argued that the maximum was appropriate given that his office previously sued Facebook in 2018 for violating the same law.
Washington’s Transparency Act requires ad sellers such as Meta to maintain and make public the names and addresses of those who purchase political ads, the target of those ads, how the ads were paid for, and the number total views of each advertisement. Ad sellers must provide the information to anyone who requests it. Television stations and newspapers have obeyed the law for decades.
But Meta has repeatedly opposed the requirements, arguing unsuccessfully in court that the law is unconstitutional because it “unduly burdens political discourse” and is “virtually impossible to fully comply with”. Although Facebook maintains an archive of political ads served on the platform, the archive does not disclose all of the information required by Washington law.
The stream30:03Full conversation with Frances Haugen: why the whistleblower thinks Canada could lead a coalition to demand changes on Facebook
“I have only one word to describe Facebook’s conduct in this matter: arrogance,” Ferguson said in a press release. “He intentionally ignored Washington’s election transparency laws. But that wasn’t enough. Facebook argued in court that those laws should be declared unconstitutional. It’s mind-blowing. Where’s the corporate accountability?”
In 2018, following Ferguson’s first lawsuit, Facebook agreed to pay $238,000 and pledged transparency in campaign finance and political advertising. He then said he would stop selling political ads in the state rather than comply with the requirements.
Nonetheless, the company continued to sell political ads, and Ferguson sued again in 2020.
#Meta #Shares #Drop #Earnings #Release #Company #Worth #RadioCanada #News