Cliches are trite. That said, all good things must come to an end. Facebook has reported its first-ever drop in yearly revenue in its most recent financial results. The dip isn’t much, at all, but it’s a sign of things to come for parent company Meta. The rest of the tech world probably won’t escape unscathed either.
Facebook’s revenue for the second quarter of 2022 was R480 billion ($28.8 billion). That’s a drop of 1% for the company. 1% isn’t much (unless you’re part of the 99%) but it’s still the first time the social network has experienced a fall like this.
Facebook experiences printer issues
And that’s just Facebook’s performance. Meta is the new parent company, and that suffered an even larger decline. Profits for the company overall were ‘just’ R111 billion ($6.7 billion), a decline of 36%.
There are several reasons why Meta and the social network have taken this comparative battering. Apple’s ‘app tracking transparency’ change has given Facebook in particular a solid whack in the essentials. A considerable amount of ad revenue just disappeared off the board when Apple made its change.
Mark Zuckerberg is also betting heavily on the metaverse. Reality Labs lost a further R46.7 billion ($2.8 billion) over the reported quarter, adding to the $10 billion the division has already cost Meta. It doesn’t help that Apple’s recent changes also cost Facebook about the same amount in ad revenues.
Facebook and Instagram are up against serious competition from all sides. Recent attempts to turn Reels into a serious competitor aren’t being met with joy on the part of users. Upcoming changes to how users see content in feeds are also being positioned to make Meta money rather than keep users happy.
Finally, there’s the general economic downturn. If you haven’t noticed the increase in the cost of everything from petrol to groceries to… everything else, congratulations on your massive bank account. For everyone else, spending around the world is down. That includes companies like Meta and Facebook.