San Francisco: Facebook’s parent firm Meta on Wednesday posted a $10 billion (Dh36.7 billion) quarterly profit that missed expectations alongside a downbeat forecast, sending shares plummeting some 20 per cent in after-hours trading.
The social media giant is investing heavily in its metaverse vision for the internet’s future, but all eyes are on how it will perform in the immediate future.
“We expect continued headwinds from both increased competition for people’s time and a shift of engagement within our apps towards (features)... which monetize at lower rates,” the company said in an earnings statement.
Costs at Meta surged 38 per cent compared to the same period a year earlier, and the number of employees was up 23 per cent to 71,970 by year’s end.
Above all, the company warned that the rules imposed by Apple last year on ad targeting could have a negative impact on its financial results in the fourth quarter.
In the update of iOS, its mobile operating system, Apple required application publishers to ask permission before collecting data, much to the regret of companies like Meta that rely on that information for ad targeting.
These are the first results released since the company’s name change in late October, which was both a turn toward the metaverse vision and a turn away from its scandal-prone social media empire.
The Silicon Valley giant’s whistleblower crisis last year highlighted accusations that executives prioritized growth over keeping their billions of users safe.
Scathing news reports based on internal documents leaked by ex-employee Frances Haugen rekindled long-deadlocked regulation efforts, but US lawmakers have made little progress since.
Facebook founder Mark Zuckerberg sought to highlight positives in the results.
“I’m encouraged by the progress we made this past year in a number of important growth areas... we’ll continue investing in these and other key priorities in 2022 as we work towards building the metaverse,” he wrote.
In this future that evokes science fiction, the public will use augmented reality glasses and virtual reality headsets to find their way around, work or play.
But its construction means tens of billions of dollars of investment in the Facebook Reality Labs branch, without any benefits for a long time.
In terms of users, the company has continued to expand, but at moderate rates.
As of December 31, 2021, 2.8 billion people were using one of its four platforms and messenger services at least once a day, and 3.6 billion at least once a month.
