In the 11 minutes that followed the markets' closing on February 2, Facebook's parent firm, Meta, dropped more than 20% in value. The firm stands to lose $200 billion worth of value in a single day if the decline persists for the market's opening on February 3. (Update: It held true, and the stock plummeted 26 percent)
The firm's earnings report, which produced for a negative reading and the worst day of Zuckerberg's tenure as Meta CEO, was responsible for the titanic losses.
In the United States and Canada, growth has slowed. Global daily users fell for the first time in the company's 18-year history. Reality Labs, which focuses on Oculus and Zuckerberg's Metaverse aspirations — and was expected to be a big money-maker – lost $10 billion on $2.2 billion in revenue. As he proceeds to develop the vision that only he desires in 2022, Zuckerberg anticipates these losses to "increase meaningfully." Apple's decision to ban marketers tracking users throughout the internet, the mechanism that made Facebook's predatory advertising system so effective, has resulted in a drop in advertising revenue. Finally, Meta's CEO recognised that TikTok and YouTube were eating its lunch and advertising revenue as younger generations and marketers continued to interact with short-form videos. In a show of defiance, Zuckerberg reaffirmed his optimism that Facebook's attempt at copying TikTok (Reels) may help turn things around.
All of this comes on the heels of Meta's crypto coin project, originally known as Libra and later Diem, being shut down less than three years after its inception — a textbook example of "dying quickly" — due to regulatory pressure and the reality that no one cared.
It's worth mentioning that Meta nevertheless produced a staggering $40 billion profit in 2021, thanks mostly to advertising.
However, the company's losses and bleaker forecasts for the coming year disappointed the stock market and stockholders.
The issue is that the corporation is experiencing an identity crisis from which it will be unable to buy or copy its way out. It's not the best social media app, and it's not the finest content platform. No one believes the company or its management will act in the best interests of the company. Its reputation has been tarnished by recent allegations of abusing adolescent children. It aspires to evolve, yet it is hopeless at it. Antitrust regulators are keeping a close eye on the corporation, so a big acquisition is out of the question. Its track record of developing its own products indicates that it will not be able to create its way out.
And the Metaverse, the vision on which Zuckerberg is willing to stake his entire company — and his entire life — is still a few years away (some predict as many as ten), and the project is already bleeding billions of dollars and crashing the stock price, the one thing that keeps the company, and Zuckerberg himself, in the good books of the shareholders, despite the constant disaster in which the company is enveloped in.
Facebook's supremacy as the most popular social networking app is in jeopardy, and the transition to the Metaverse is moving slowly and at a high cost.
And the path ahead appears to be hazy. On the earnings call, Zuckerberg admitted as much, saying that while the direction is obvious, the "path ahead is not yet perfectly defined." That may be true of the company's founder's ambition, but one thing is certain: the company is dying slowly.
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