Meta said it suffered a hit from Apple Inc.’s privacy changes to its operating system, which have made it harder for brands to target and measure their ads on Facebook and Instagram.
Shares of Facebook owner Meta Platforms Inc. fell more than 20% late on Wednesday after the social media company posted a weaker-than-expected forecast, attributed to it. Apple privacy changes and increased competition for users from competitors like TikTok.
(Sign up for today’s cache of our technology newsletter, for insights on emerging topics at the intersection of technology, business and policy. Click Here To subscribe for free.)
Facebook’s global daily active users declined from 1.930 billion to 1.929 billion for the first time last quarter.
meta said Apple Inc.’s secrecy faced with changes to its operating system, which has made it difficult for brands to target and measure their ads on Facebook and Instagram. It also cited macroeconomic issues such as supply-chain disruptions.
The 18-year-old tech giant, which also faces pressure from platforms such as TikTok and Google’s YouTube, said the coming quarter is likely to see a growing competition for users’ time and lack of engagement towards such features. Revenue growth is expected to slow in the quarter. Video offering reel, which generates less revenue.
Facebook reported 2.91 billion monthly active users in the fourth quarter, showing no growth compared to the previous quarter.
The after-hours drop in Meta shares vaporized $200 billion of its market value, while Pearce’s Twitter Inc., Snap Inc. and Pinterest Inc. lost another $15 billion in value.
Shares of Alphabet Inc., which Record quarterly sales that exceeds expectations On Tuesday, were down about 2%.
Meta, the owner of the world’s second largest digital advertising platform after Google warned that its advertising business faced “significant uncertainty” in the fourth quarter,
Meta’s chief financial officer, Dave Weiner, told analysts on a conference call that the impact of Apple’s privacy changes for 2022 could be “on the order of $10 billion.”
Read also | Facebook’s new interface to tell how much Apple, Google charge creators
Apple’s changes to its operating software give users the option of preventing apps from tracking their online activity for ads, making it harder for advertisers who use data to develop new products and learn their markets. rely on.
Meta forecast first quarter revenue to be between $27 billion and $29 billion. Analysts were expecting $30.15 billion, according to Refinitiv’s IBES data.
Insider Intelligence Analyst Debra Aho Williamson said, “It’s clear that there are many major hurdles ahead as Meta faces tough new competition for ad revenue like TikTok, and as it’s affected by Apple’s iOS changes to its ongoing ad targeting and marketing campaigns, it’s not a good idea.” Measurement poses challenges.”
According to Refinitiv’s IBES data, the company’s total revenue, the bulk of which comes from ad sales, rose to $33.67 billion in the fourth quarter, up from $28.07 billion a year ago.
“I am encouraged by the progress made over the past year in several important growth areas such as reel, commerce and virtual reality, and we will continue to invest in these and other key priorities in 2022 as we work towards building the metaverse. CEO Mark Zuckerberg said in the earnings release.
Read also | Apple’s anti-app tracking policy is about profit, not privacy, Facebook says
In Meta’s earnings call, he said competition for users was a factor influencing the business, mentioning short video app TikTok by name and emphasizing Meta’s commitment to providing services for young adults.
The net loss from Reality Labs, the company’s augmented and virtual reality business, was $10.2 billion for the full year 2021, compared to a loss of $6.6 billion the previous year. This was the first time the company had broken down this segment in its results.
Zuckerberg previously warned that the company’s investments in the sector would cut its 2021 operating profit by $10 billion and would not be profitable “anytime in the near future”.
Reality Labs posted revenue of about $2.3 billion in 2021. The company hasn’t made public the sales numbers for its virtual reality Quest headset.
Read also | Facebook’s cryptocurrency venture to shut down after asset sale to Silvergate
The company said Wednesday that it will change its stock ticker to “Meta” this year, the latest move in its rebrand to focus on the Metaverse, a futuristic idea of a virtual environment where users can work, socialize and can play. Meta did not comment on the price of the deal with Roundhill Investments, which said that in January it would stop using Symbol for its Roundhill Ball Metaverse ETF.
The tech giant, which changed its name in October to reflect its Metaverse purposeBetting that the Metaverse will be the successor to the mobile Internet.
“Investors looking at Meta are starting to realize that buying their stock is no longer an investment in their advertising platform,” said Flynn Jagger, CEO of social media agency Online Optimism. “Investing in Meta looks like a commitment now that you believe the Metaverse will transform the experience of today’s Internet consumers.”
Meta’s rebrand comes at a time of increasing scrutiny from lawmakers and regulators over allegations of anti-competitive conduct and the implications of how it handles harmful or misleading content on its Facebook and Instagram platforms.
,