Social media giant Facebook lost daily users for the first time in its 18 years of operations, with massive losses in Africa and Latin America.
The number of the social media giant users fell to around half a million in the final quarter of 2021, which suggests that Facebook has already reached its peak and that the product is saturated globally.
Even though the number of daily users of Facebook has decreased, the number of people who log in to the platform every month has climbed. Furthermore, the company continued to earn somewhat improved revenue per user.
However, the company's sister apps, Instagram, WhatsApp, and Messenger, continued to grow users at a fair pace, meaning the company is not struggling totally.
According to Washington Post, the shares of Meta Platforms Inc., the owner of Facebook, plunged more than 20% on Wednesday. It came after the tech company passed a weaker forecast than expected.
After Meta's fourth-quarter earnings performed below estimates, Mark Zuckerberg's worth might be depleted by $24 billion, one of the largest one-day drops in wealth ever, as per Bloomberg.
Increasing Competition, Changing Demands
The company blamed the privacy modifications of Apple and the increased competition from other social media platforms like TikTok.
After-hours drops in Meta shares wiped off $200 billion in market value, while counterparts Twitter Inc, Snap Inc, and Pinterest Inc. each lost $15 billion.
Alphabet Inc's stock was down roughly 2% after the company reported record quarterly sales that exceeded projections on Tuesday.
Meta, which owns the world's second-largest digital ad platform behind Google, has previously warned that the fourth quarter would bring substantial volatility to its advertising business.
Zuckerberg, founder, chairman, and CEO of Meta, pointed out the threat YouTube and TikTok pose to his company due to the increased interest of users for short-form videos.
Per Forbes report, Facebook has not had to contend with a major competitor during previous strategy updates, according to Zuckerberg, who described the situation as "pretty unique."
He also sees Tiktok as a major rival that is "still growing at a rapid pace" that is why Meta has been aggressive in developing its own short online video product so it could go toe-to-toe with TikTok, owned by Chinese company ByteDance Ltd.
Rebranding Will Shape Meta's Future
The company has invested heavily in its goal of becoming a hardware juggernaut, including hiring over 10,000 people and relaunching itself as Meta. However, that change is still in its infancy.
When Facebook changed its name to Meta, Zuckerberg said it was like laying the road map of the company's direction. "This year is going to be about executing," he said.
Meta executives hope that the social media company's rebranding and focusing on hardware could help address its political problems.
Last year, thousands of internal Facebook documents were leaked by a whistleblower, revealing that the social media platform is accelerating polarization in society. Plus, its algorithms have boosted misinformation and provided opportunities for violent groups to organize unpleasant initiatives.
Meta is under grave government investigation, with a serious antitrust action pending in the United States, while upcoming internet regulations in Europe may drastically alter its operations, per Reuters.
Related Article : Facebook's Meta Says It's Building World's Faster AI Supercomputer, Promises Free Internet Access
