For the first time since going public in 2012, Facebook parent company Meta has faced a drop in revenue. Turnover amounted to 116.61 billion dollars (106.57 billion euros) last year, the American group announced – that was one percent less than in 2021. Nevertheless, the share price rose by 19 percent after the figures had been announced and an even sharper slump was expected.
The shares of the Facebook parent company, also listed in Frankfurt, also rose by more than 19 percent on Thursday. “The mother of Instagram and Facebook continues to grow and save — a fantastic combination for shareholders,” said Jürgen Molnar, capital markets strategist at trading house RoboMarkets. Investors are springing into action, largely due to an optimistic outlook for the current quarter and $40 billion in share buybacks.
In the fourth quarter of 2022, Meta reportedly reported revenue of $32.17 billion (down four percent year-over-year) and cut its net profit in half to $4.65 billion — analysts had expected $6 billion.
Strong competition from TikTok
Mark Zuckerberg’s group faces competition from the online service TikTok. The service, with which short videos can be shared, is mainly chasing the market share of Meta subsidiary Instagram. The economic crisis is also weighing on Meta as companies spend less on advertising on the various platforms. In November, Meta announced it would cut 11,000 jobs, equivalent to about 13 percent of its total workforce. There should be no new hires until the end of March.
However, according to the group, the number of daily Facebook users rose above two billion for the first time last year. In addition to the online network Facebook and Instagram, Meta also includes the messaging service Whatsapp. “The number of people using Facebook, Instagram and WhatsApp on a daily basis is higher than ever before,” Zuckerberg said.
Metaverse chapter eats billions
In contrast, losses increased in the experimental Reality Labs division, which is responsible for the virtual world called Metaverse. In the fourth quarter of 2022 alone, the minus was $4.3 billion.
The motto for 2023 is the “Year of Efficiency,” Zuckerberg announced. Among other things, he wants to streamline middle management and end projects that are not going well enough. In addition, artificial intelligence should help software engineers to work more productively.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
