For about a year, Meta – the parent company of Facebook, Instagram, and WhatsApp have struggled with dwindling figures. Though it may look good on the outside, but the battle of market shares cut by competing apps is a game changer.
What is happening
The value of the company’s shares has plummeted, while revenues and profitability are also declining. On Wednesday, things got worse as the company, which is now called Meta, gave investors an update on the three months that ended in September. Sales decreased by 4% to $27.7 billion from a year ago, but earnings were cut in half.
Why this is happening
Businesses are cutting their advertising budgets due to the uncertain economic climate, as changes to Apple’s privacy settings have made their targeted advertising less effective, and as competition from rivals like TikTok has gotten more intense. People now switch to organic marketing and platforms that help that.
Going deeper
When the company disclosed in February that it had lost daily users for the first time ever, investor confidence plummeted. Then, in July, the business reported its first quarterly revenue decline as businesses cut their advertising budgets.
The company’s value has been reduced by hundreds of billions as a result of shares of the company trading about 60% below where they did at the beginning of the year. The business managed to fend off a fall in customers while still making large profits — about $4.4 billion in the three months that ended in September.
The number of daily users on one of the business’s platforms increased from 2.88 billion in the previous quarter to 2.93 billion in the three months that ended in September, according to the company. But a lot of investors worry that the corporation has lost its way.
What Else?
Even if the US and Europe are not adding new users to the primary Facebook network, it is nevertheless expanding globally.