Investors are worried about a rare drop in Facebook user growth—and spending around its metaverse project.
during the fourth quarter. It’s worth emphasizing the D Word—decline—since this marks the first time the platform has experienced such a decrease. Facebook blamed the downturn on increased competition from TikTok and a rise in internet data costs in India. It is the most recent sign of Facebook’s struggles to maintain what was a decade-long dominance over social media. That has long been obvious about America, but Facebook has managed to make up for the drop in the U.S. with growth overseas.
This ties directly into the second trouble bothering investors. With the core Facebook platform suffering, Zuckerberg has shifted the company’s focus to augmented and virtual reality technologies, an attempt to build a new social network aroundto attract young users. But getting to the metaverse isn’t going to be a fast journey—or an inexpensive one. Facebook spent $10.
Zuckerberg and Meta have experienced a miserable few months, and despite many years of scandal and a teflon stock, the weight of all that is coming down on the shares. Which is bad for Zuckerberg personally; the majority of his net worth is centered in Meta stock. It’s not great either for Facebook cofounders Dustin Moskovitz and Eduardo Saverin , who have moved on from Facebook but retain significant stakes in the business.
In addition to the metaverse and growth concerns, a whistle-blower scandal enveloped the company last fall, prompting fresh questions about its handling of bad content on its site and Zuckerberg’s leadership. Another complication: Apple’s change to its iPhone software, which has made it harder for companies like Meta to sell digital advertising. Meta on Wednesday said it expects to lose $10 billion in annual revenue from the switch.
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