Meta, or Facebook as we more commonly know, is facing some difficulties. Meta Platforms Inc’s shares dived more than 20% on Wednesday. Meta reported that daily users of Facebook declined for the first time, going from 1.93 billion to 1.929 billion. It seems like just a drop in a million, but considering that this is the first time in history that the number of users decreased, it’s pretty shocking what happened. Facebook had 2.91 monthly active users in the fourth quarter, which is no different from the previous one. Due to this, Meta’s market value decreased by more than $200 billion, which is more than the market values of entire companies.
Meta is explaining this was due to outside pressure from other platforms such as Tik Tok and Youtube. Also, Apple’s new security system allegedly played a role in decreasing Meta’s profit and users. Apple has banned apps from tracking their devices, and allowed the owners to decide which apps could track them and which can not. Facebook is an app which uses people’s tracking information to send targeting ads, but that is impossible if an iPhone user suddenly switches off his/her app tracking availability. This is also critical for Facebook’s profit through sending those ads, since iPhone users tend to have a higher purchasing power compared to Android users. Meta has already warned that Apple’s policy will lose them more than $10 billion in revenue.
Along with continuous pressure from Washington about antitrust acts, it is getting harder for Meta to simply buy up their competition. In the past, Facebook bought Instagram and Whatsapp with no regulations whatsoever. However, companies and regulators have continued to question Meta’s dominance in the Social Media market, although Zuckerberg furiously argues Facebook has an “unprecedented” number of competitors. It is unsure what the future is for Meta. Will their “Metaverse” regain their dominance in the industry, or is this the beginning of the end for the biggest Social Networking company in the world?