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Meta’s tumultuous 2022: There’s no greater threat than the company’s own mistakes

To be fair, no tech company is immune to economic turmoil in 2022. Sure, TikTok is a serious threat to Meta’s survival but no threat to Meta’s survival. The meta is bigger than the mistakes of this company itself.

In February 2022, Meta made stock market history but not in a positive way. Overnight, the company lost $237 billion in market capitalization – the largest single-day drop in value in American history to that point.

The drop comes after the company’s dismal earnings report, when CEO Mark Zuckerberg talked about the fraught transition from social media to the metaverse.

Of course, this loss is somewhat beyond Meta’s control, especially as the volatile global economy is not their fault. However, Meta seems to have made the situation worse for itself by continuing to operate with the philosophy of “Make Mark Happy”. This means that more and more money is being poured into the metaverse project that is not sure how successful the future will be.

Let’s review the difficulties that Meta has experienced in 2022:

Meta s tumultuous 2022 There s no greater threat than the company s own mistakes | ICT News

According to the Wall Street Journal, Facebook’s period of rapid user growth is over. Statistics for February 2022 show that Meta’s core social networking application, Facebook, lost about half a million users in the fourth quarter of 2021 compared to the same period a year earlier.

This is the first drop in users in the company’s 18-year history, signaling growth for the platform may have peaked. Meta’s quarterly user growth was also at its slowest in at least three years.

Senior Meta executives have pointed to several other growth opportunities, such as WhatsApp, the messaging service that has yet to generate significant revenue. However, those efforts have not yet yielded many positive results. Following Facebook, investors may be looking at whether other Meta apps like Instagram will fall into the same trap.

Meta s tumultuous 2022 There s no greater threat than the company s own mistakes | ICT News

In the spring of 2021, Apple introduced an iOS update that allows users to opt out for apps like Facebook to track their online activity. This took a toll on Meta’s business as targeting ads, one of the company’s main monetization tools, became much more difficult than before.

What is more painful is that iPhone users are a much more lucrative audience for Facebook advertisers than Android phone users. Meta says Apple’s changes could cause $10 billion in lost revenue in 2022.

Meta s tumultuous 2022 There s no greater threat than the company s own mistakes | ICT News

It can be said that Meta’s trouble is the luck of its competitors. David Wehne, CFO of Meta, said Apple’s changes have made advertisers know less about user behavior. Therefore, many people have begun to shift their advertising budget to other platforms, including Google.

Also in February 2022, Google reported record revenue, especially in e-commerce search ads.

Unlike Meta, Google is not heavily reliant on Apple for user data. Wehner said it’s likely that Google owns “more third-party data for measurement and optimization purposes” than Meta’s advertising platform.

Wehner also pointed to Google’s agreement with Apple to become the default search engine for Apple’s Safari browser. That means Google search ads tend to appear in more places, gathering more data that can be useful to advertisers. That’s a big deal for Meta in the long run, especially if more advertisers turn to Google search ads.

Meta s tumultuous 2022 There s no greater threat than the company s own mistakes | ICT News

For more than a year, Zuckerberg has shown how much of an enemy TikTok is to Facebook. The number of TikTok users has grown to more than 1 billion thanks to posts containing short videos that are strangely “addictive”. And it is competing fiercely with Meta’s Instagram for users’ attention.

To increase competition, Meta mimicked TikTok with a video feature called Instagram Reels. Zuckerberg said Reels is currently the number 1 engagement feature on the app.

One problem, however, is that while Reels can attract users, it doesn’t monetize as effectively as other Instagram features, like Stories and the main feed.

Zuckerberg compared the situation to a few years ago when Instagram introduced Stories, a Snapchat clone. Stories also didn’t make a lot of money for the company when it launched, but later did. Even so, some experts say there’s no guarantee Instagram Reels can repeat this feat.

Meta s tumultuous 2022 There s no greater threat than the company s own mistakes | ICT News

Zuckerberg strongly believes that the next generation of the Internet is a virtual universe – a still vague and theoretical concept that involves people moving through different virtual and augmented reality worlds. , to the extent that the 38-year-old billionaire is willing to spend billions of dollars on this project.

In 2021, Meta spent more than $10 billion on the metaverse, and Zuckerberg said the company will spend more money in the future. However, there is also no guarantee that this bet will succeed. Unlike Facebook’s move to mobile in 2012, virtual reality use hasn’t really gone mainstream.

In essence, Zuckerberg is asking employees, users, and investors to put faith in his multi-dimensional vision. That’s a big ask for something that will cost the company billions of dollars in the years to come, but the possibility of success remains open.

Meta s tumultuous 2022 There s no greater threat than the company s own mistakes | ICT News

In June 2022, “female general” Sheryl Sandberg announced her departure from Meta after 14 years of attachment. In her farewell post, Sandberg spoke of the challenges of social media and the role of Meta: “The products we create have a huge impact, so it’s our responsibility to build on them. them in a way that protects privacy and keeps people safe.”

Now, she says she will “write the next chapter” of her life by focusing on her charity. Sanberg’s departure is considered a great loss for Meta because she has been the person who has been with and helped Zuckerberg steer the company for decades, especially during difficult times.

Meta s tumultuous 2022 There s no greater threat than the company s own mistakes | ICT News

An Internet giant whose growth rate is decreasing. A brilliant CEO is harboring risky ambitions. A workforce is worried about high demands and possible mass layoffs.

That’s what happened inside Meta in October 2022. According to Business Insider, that’s also what happened nearly a decade ago at Yahoo.

As Meta transitioned to become a metaverse company amid stagnating user growth and slowing ad sales, a lot has changed here, including the growing “pain” of those people involved.

The New York Times reported on October 9 that current and former Meta employees are skeptical of the push for virtual reality (VR) and augmented reality (AR), and warn sensitive to Zuckerberg’s changing priorities.

In fact, Zuckerberg’s plan to implement the metaverse is not unusual in the technology world, but it is unlikely that it has brought “sweet fruit” for Meta. It can be said that this is the “game” that Zuckerberg needs to win.

“Facebook has the guts, the capital, and the ability to let the metaverse grow even further. But if they make a mistake, they will have to pay a price that is not cheap, “said an expert.

Meta s tumultuous 2022 There s no greater threat than the company s own mistakes | ICT News

By November 2022, USAeta once again caused a stir when it announced the layoff of about 13% of its workforce (11,000 employees).

Zuckerberg apologized: “Today, I’m announcing one of the most difficult decisions in Meta history. I decided to let more than 11,000 talented employees go. The company is implementing a policy of cutting and freezing recruitment to become leaner and more efficient. I take responsibility for these decisions. I know it’s been really difficult for everyone and I’m especially sorry to those affected.”

Meta’s decision to mass layoffs comes amid a continuous decline in revenue. As of the end of 2022, the company’s stock is down more than 70% year-over-year.

Source: NYT, Mashable

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