Facebook Announces Metaverse Losses, Complains About Apple’s Privacy Changes
The big picture from the earnings call is that the company’s Family of Apps is doing gangbusters business, while Reality Labs is a gigantic pit into which the company tosses billions of dollars. Overall the company pulled in $40 billion in net income in 2021, a 35 percent increase year-over-year, according to a summary posted by Slashgear. All the income is on the apps side of the equation, however.
In Q4 2021 Meta’s Family of Apps earned an impressive $15.9 billion dollars, while its Reality Labs segment burned through an astonishing $3.3 billion in the 4th quarter alone. Reality Labs lost around $10 billion total in 2021. Of course, the Metaverse isn’t just going to spring up overnight, so the company obviously needs to invest heavily in that side of its business, but it’s interesting to see the actual cost involved thus far.
Despite increases in revenue for the company, its 4th quarter earnings weren’t up to expectations. This caused Meta’s stock to fall precipitously. The Company Formerly Known as Facebook also reported the first ever decline in daily users, according to CNBC’s summary. Despite the drop, it still reported it has 2.82 billion Daily Active People (DAP), and 3.59 billion Monthly Active People. Most of the adult world is still using Facebook, or one of its associated apps. Former company insider Frances Haugen filed an SEC complaint last year alleging the company had been manipulating its reporting on the size of its customer base but there’s no evidence it is still doing so.
In its earnings call the company also pointed out several “headwinds” it is currently dealing with, and which will likely inhibit its growth in 2022. The most interesting, to us at least, is that Meta has finally put a price tag on Apple’s decision to allow iOS users to opt-out of allowing apps to track them, and it’s a a big number. “We believe the impact of iOS overall is a headwind on our business in 2022,” said Meta CFO Dave Wehner in a transcript by CNBC. “It’s on the order of $10 billion, so it’s a pretty significant headwind for our business.” To be fair to Dave, he admitted $10 billion is just a guess, as it’s a difficult metric to quantify accurately.
Meta also pointed to several other problematic situations, including “continued headwinds from both increased competition for people’s time and a shift of engagement within our apps towards video surfaces like Reels, which monetize at lower rates than Feed and Stories.” It sounds as though people are using Tik Tok a lot (competition for people’s time). Additionally, users on Meta’s own apps are watching more Reels instead of scrolling through their feed or watching stories. Meta also said supply chain disruptions combined with inflation have caused companies to lower their ad budgets, which has affected its ad sales.
Continue reading
FTC Files Antitrust Case to Break Up Facebook
New York Attorney General Letitia James has announced a major antitrust case against Facebook, which will be joined by 47 other state and regional AGs. And that's not all: the Federal Trade Commission (FTC) is filing a separate case against Facebook later today.
Signal, Facebook Spar Over Ads Disclosing What Facebook Knows About You
Signal claims Facebook banned it for speaking truth to millions of people. Facebook claims Signal made the whole thing up. Welcome to the internet, where the validity of everything is disputed and everyone is mad about it.
Facebook Announces a New Oculus VR Feature: In-Game Ads
Facebook will soon build ads into your VR games. The company claims the advertising will benefit developers, but it appears to have something else in mind.
Facebook Force-Fed Garbage to 140 Million Americans a Month
Facebook refused and ignored its own staff's attempts to improve the service, even after it knew its own algorithms were feeding people low-quality content they didn't want to see.