Meta loses profits as Facebook loses its users
Facebook's parent company, Meta, posted a bleak mix of sharper-than-expected profit drops, lower user numbers and threats to its advertising business, dropping its stock nearly 22 percent hours later.
Tense markets have already penalized pandemic-era lovers, including Netflix, for disappointing results, and Meta sensed this after quarterly profits of $10.3 billion and daily user growth that didn't meet expectations.
However, the Facebook-branded platform also reported that it lost nearly one million daily users globally between the last two quarters of 2021 - a small number for an app with nearly two billion daily users, but that could be a wake-up call for recession.
Company executives have repeatedly cited competition from other networks besides TikTok, while facing multiple investigations and complaints of abuse of power.
Analysts had expected 1.95 billion daily active users on Facebook, but Meta reported 1.93 billion - a key indicator of the company's growth trajectory fueled by people choosing to interact with its platforms.
Meta is betting big on their belief that the metaverse is the next big improvement in how people live with the internet. In this sci-fi-like future, people will use augmented reality glasses and virtual reality helmets to commute, work or play. But its construction is worth tens of billions of dollars long irreversible in investments in Facebook's subsidiary Reality Labs.
Financially, Meta had sales of $33.67 billion, in line with its forecast, but fourth-quarter net income was $10.3 billion, down eight percent from a year ago.