It's 2022, yet Facebook is the most used social media network on planet earth. The growth has been upright and the company has never seen a decline in the number of users since its inception, till now. On Wednesday, Meta CEO Mark Zuckerberg announced that Facebook saw its first-ever decline in the numbers of users in Q4, 2021. He also announced that ad growth for the company has been slow.
Shortly after the announcement, Meta stock plunged 20% wiping roughly $200 billion in its market value. The fall in market valuation shows that the company's rebranding to Meta isn't enough to distract investors and shareholders from the problems of Facebook. The problem of slow growth plagued all of the Meta apps, including WhatsApp and Instagram.
Facebook lost nearly 1 million users daily in North America last quarter. As the region is its money milking cash cow, the company also saw lower ad revenue. The drop for Facebook was from 1.93 billion daily users to 1.929 billion last quarter. The company hasn't revealed the slow growth of Instagram, but only 10 million daily users have signed up on the platform last quarter.
Source: Time
Meta still managed to remain profitable. The company nearly made $40 billion in profit last year. But, the company is losing money in its metaverse-related Reality Labs business. Reality Labs is working on the Quest VR headset, VR software, a smartwatch, forthcoming AR glasses, and many other Mark Zuckerberg's metaverse dreams.
Meta reported that Reality Labs lost $10.2 billion last year and reported a revenue of only $2.3 billion. Meta hasn't revealed the number of Quest sales, or anything related to AR/VR sales, but it is said that the sale is only around 10 million units. Mark Zuckerberg also announced that Meta will release its VR headset later this year which will be priced in the "high-end spectrum."
Zuckerberg's bet is still on AR, VR, and metaverse though. The company still sees the "combination of AR and VR as the next major computing platform" even though the platform is losing billions of dollars right now. Along with metaverse, Meta will continue to work on Instagram Reels. Zuckerberg admitted that the company faces tough competition from TikTok and it wants to keep a long-term focus on Reels.
"People have a lot of choices for how they want to spend their time and apps like TikTok are growing very quickly. And this is why our focus on Reels is so important over the long term. As is our work to make sure our apps are the best services out there for young adults, which I spoke about on our last call."
[...] "while the video has historically been slower to monetize, we believe that over time short-form video is going to monetize more like feed or Stories than like Watch – so I'm optimistic that we'll get to where we need to be with Reels too."