For the first time since its public launch in 2007, Meta ( Facebook) reported a sharp decline.
The company's revenue was 28.82 billion USD - down 1% compared to 29.07 billion USD in the second quarter of 2021.
Refinitiv analytics company forecasts Meta's third quarter revenue will be between $26 billion and $28.5 billion, down 2% to 11% from a year ago.
Meta is gradually "denying"(!? )
CNBC said that Meta shares have lost about half of their value since the beginning of the year. Since last year, Facebook has been affected when Apple updated security features on the new iOS version, thereby limiting Meta's ability to track users. In addition, economic difficulties have caused many companies to decide to cut advertising budgets.
Faced with unsatisfactory results in the second quarter, Meta made less optimistic forecasts in the second quarter, arguing that "weak supply demand throughout the second quarter will continue to be affected by uncertainty in the macro economy".
Mark Zuckerberg plans for Meta's future
1. Continue to fire employees
In June, during a weekly employee Q&A session, Zuckerberg announced that recruitment would be frozen and said he would manage performance more actively to fire employees who could not achieve their targets.
Mark Zuckerberg - CEO of Meta said that the company will reduce the number of employees next year to cope with the global economic recession. "This is a period that requires high concentration and I hope we will complete more work with less resources."
2. Focus on developing Reels
According to Zuckerberg, the number of users accessing Reels is growing rapidly. Previously, that number accounted for 20% of people's time spent on Instagram, and this quarter, it has increased by 30% on both Instagram and Facebook.
Mark believes Meta's transition to AI-powered recommendation systems (currently, 15% of Facebook's recommendations are made by AI) will improve many things even more.
Recently, Mark Zuckerberg said that Facebook's Instagram Reels service, a "car" that competes directly with TikTok, has achieved 1 billion USD in annual revenue. Despite investing heavily in Reels, this product does not generate as effective revenue as Instagram Stories or Feeds.
3. Metaverse card loser
With some of the product and business limitations we face today, I feel even stronger that developing these platforms (metaverse) will unlock hundreds of billions of USD if not thousands of billions, the director said.
This is clearly a very expensive job for the next few years, but as metaverse becomes more necessary in the way we live, I believe we will be happy that we have played an important role in building this.
As part of this goal, Meta will continue to expand Horizon - the new Metaverse platform, and will launch a web version on all platforms later this year. Horizon is a paid platform with makeup and customization of user representation.
However, Meta's focus on Reels seems more of an introduction to TikTok than a practical effort to introduce unique attractive features. It also seems like a mandatory choice for users.
According to Mike Proulx, VP of Chief Analyst at Forrester, Meta is actively trying to make money from Reels, which is essentially forcing it to rely on users - in an effort to compete with TikTok.
Videos posted under 15 seconds on Instagram will now be shared as Reels. Instagram has also tested a new full-screen user interface that imitates TikTok and highlights Reels on the News Board. A forced interaction strategy will not bring Gen Z back to Meta's platform and could eventually speed up their migration process.
In addition, a recent study shows that only 16% of people understand what Metaverse is. According to Proulx, consumers are skeptical about Metaverse every day, making it much more difficult for Meta to develop users for its Horizons platform to any significant scale in the near future.
