But user numbers are increasing
Facebook group is growing slowly
4/28/2022 1:04 am
For Facebook’s parent company Meta, things aren’t going as smoothly as they used to: The growth is still growing, but much more slowly than during the peak phase of the advertising business during the corona pandemic. The profit even goes back. Nevertheless, investors are not letting the stock fall, but instead hit it after hours.
At the start of the year, Facebook owner Meta grew as slowly as it did when it went public ten years ago. Weaker advertising budgets and Apple’s new data protection rules allowed sales in the first quarter to climb by just seven percent to $27.9 billion, as the world’s largest Internet network announced on Wednesday after the US stock market closed. Profits fell by around a fifth to $7.47 billion due to significantly higher spending, including in new employees and investments in products.
On Wall Street, however, the drop in profits and weak growth did not cause any displeasure at first. The paper climbed 13 percent in after-hours trading. However, the share has lost almost half of its value since the start of the year. Investors were now primarily concerned with the fact that the number of daily active users was above expectations at 1.96 billion, an increase of four percent compared to the same period last year. This means that around every fourth inhabitant of the world accesses their account on Facebook, WhatsApp, Instagram or other meta services every day. In the fourth quarter, the number of daily active users fell for the first time in the company’s history.
On Tuesday evening, Google had already disappointed with a weakening advertising business due to the Ukraine war and the global economic slowdown. While Google is by far the world’s largest online advertising medium, Facebook has established itself in second place. During the Corona crisis, both US technology groups benefited from the online boom and the associated bubbling advertising revenue. For the current quarter, Facebook is now a little more confident than for the first quarter and expects sales of 28 to 30 billion dollars.
When it comes to spending, Facebook is lowering the bar a little and only wants to spend 87 to 92 billion dollars this year instead of the previously planned 90 to 95 billion dollars. Most recently, the group founded by Mark Zuckerberg in 2004, alongside competitors such as the ByteDance subsidiary TikTok, was also affected by Apple’s data protection rules. The new operating system for Apple’s iPhone makes it harder to personalize advertising, making it less effective and causing advertisers to pay less.