Meta's quarterly profit drops as technology hits tough economy

Meta’s quarterly profit drops as technology hits tough economy

Meta reported that its profit more than halved to $4.4 billion in the third quarter.

Facebook’s parent company Meta said Wednesday that its profit more than halved to $4.4 billion in the third quarter from $9.2 billion a year earlier, and said it was planning “significant changes” to boost efficiency in a challenging economic environment.

The social networking giant, which is facing stagnating user numbers and cuts in ad budgets, said revenue fell to $27.7 billion from $29 billion a year earlier.

“We are approaching 2023 with a focus on prioritizing and efficiencies that will help we “Navigating the current environment and the emergence of a stronger company,” said Meta President. Mark Zuckerberg.

Meta shares fell 19.1 percent to $105 in after-market trade, a price less than a third of what it was at the beginning of this year.

“As we continue to explore some challenging dynamics – choppy macro EconomieIncreasing competition advertising Signal Loss and increased costs from our long-term investments – I have to say our product trends look better than what I see next, some of the comments I’ve seen are to analysts.”

Facebook’s monthly active users rose just 2 percent to 2.96 billion at the end of September, Meta reported.

Meanwhile, the number of technical personnel Titan It reached 87,314, a 28 percent increase over profit a year ago Report advertiser.

“We are making major changes across the board to work more efficiently,” Meta said in the statement.

The Silicon Valley-based technology company said it expects to keep headcount levels in check over the next year.

Zuckerberg said that while tightening his belt, Meta will focus on Artificial intelligence Which supports recommendations in shows such as the short video feature Reels, as well as advertising messaging platforms and visibility for metaverses.

– apple juice –

big technology The platforms were suffering from the economic climate, which is forcing advertisers to cut back on marketing budgets, and those of Apple data privacy Changes, which reduced the area of ​​​​ads personalization.

“Meta is rocking when it comes to the current state of her business,” said Debra Aho Williamson, principal analyst for Insider Intelligence.

“Mark Zuckerberg’s decision to focus his company on the future promise of Metaverse has taken his attention away from the unfortunate realities of today.”

These facts include Meta being pressured by global economic conditions and competition including TikTok and apple Allowing iPhone users to limit data collection “signals” to target money-making ads, analyst says.

Apple last year began letting iPhone users decide whether to allow their online activity to be tracked for the purpose of ad targeting — a change it said shows its focus on privacy, but which critics note does not stop the company itself from being tracked.

Meta has predicted that this policy, which affects the accuracy of the ads you sell and thus the price, will cost the social media giant $10 billion in lost revenue this year.

This week, Apple updated its App Store rules to require apps displayed there to use its payment system for sales of “enhanced” posts, which are essentially advertising messages promoted to the top of social media feeds for a price.

The App Store is the only portal for digital content to access your iPhone or iPad.

The change means that Apple will be able to charge its 30 percent commission on this type of advertising in Facebook And Instagram, where all the money previously earned went to Meta because they used their payment system.

“Apple continues to advance its policies to grow its own business while undermining others in the digital economy,” Meta said in response to an AFP query.

“Apple previously said it doesn’t take a share of developer advertising revenue, and it seems to have changed its mind now.”

Meta has long had a seemingly endless upward growth, but early this year it reported its first drop in global daily users.

In July, Meta announced its first quarterly decline in revenue and a dip in profits.

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