Meta share skyrockets: more users on Facebook & Co.

Status: 04/28/2022 11:04

US group Meta once again reports higher user numbers for its services such as Facebook, WhatsApp or Instagram. But the company’s sales are only growing slowly – and soon for nothing?

Meta, the parent company of Facebook, regained popularity among users in the first quarter. More recently, 2.87 billion users used at least one metagroup service every day, in addition to Facebook, Messenger, WhatsApp, Instagram, and virtual reality company Oculus. In the previous three months it was 2.82 billion. 1.96 billion users logged into Facebook every day, about 30 million more than three months ago.

The Tiktok clone “Reels” is growing

Three months ago, Facebook saw a decline of one million users per day, causing Meta’s share to plummet. At the time, Meta cited increased competition from China’s short video app TikTok as a reason and released its rival service “Reels” in the first quarter.

According to Meta CEO Mark Zuckerberg, users of the Instagram app have watched Reels’ videos about a fifth of the time. Videos made up half of Facebook’s watch time, and Reels is growing there too, according to the company founder.

Apple makes life difficult for Meta

However, the successful group’s growth has weakened, also due to Apple’s lower advertising budgets and new data protection rules. Apple’s measures make it more difficult to personalize advertising, thereby reducing advertisers’ willingness to pay.

Revenue increased in the first quarter year-on-year by just 7% to $ 27.9 billion. This was a very low increase for the successful group, which was also below analysts’ expectations. The bottom line is that profits fell a good fifth to $ 7.5 billion due to significantly higher expenses, including for new employees and product investments.

Meta has recently invested heavily in the development of virtual worlds, the so-called Metaverse. Meta spend increased 31% in the first three months compared to the same period last year. According to its own information, the group employed 77,805 people at the end of March, a 28% increase year-on-year.

The war slows down advertising

For the current quarter, Meta announced sales of between $ 28 and $ 30 billion. With a value of $ 29 billion from the previous year, there could also be a drop in sales. Among other things, the group refers to the weakening of business due to the Russian aggressive war against Ukraine. According to Meta, this is not only due to the disruption of the advertising platform in Russia, but also to the fact that concerns about the economic consequences of the war are slowing down the activity of advertising clients in general.

However, investors reacted positively. Meta shares were up 18 percent in after-hour trading. However, the card has lost nearly half of its value since the start of the year.

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