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<\/a><\/strong><\/p>\nEvery day, 2.88 billion people are using one of Meta\u2019s social networks, slightly below the 2.91 billion average analyst estimate.<\/p>\n
Shares of Menlo Park, California-based Meta fell 4.5% in extended trading. The stock, which closed at $169.58, has lost half its value this year.<\/p>\n
Meta is undergoing a period of immense change, with Zuckerberg trying to rally his employees to work more diligently to retain users, attract young people and prevent a migration to ByteDance Ltd.\u2019s popular TikTok app. Meta put more Reels in its apps, and started paying creators to post them.<\/p>\n
The company also made a significant change to the social apps\u2019 algorithms, to focus on showing people new kinds of content from those they don\u2019t follow. Right now about 15% of the content in a Facebook users\u2019 feed is from accounts they don\u2019t follow; on Instagram, the percentage is higher.<\/p>\n
Meta said the proportion will more than double by the end of next year. Zuckerberg called the change \u201cone of the main transformations in our business right now.\u201d<\/p>\n
Investors are focusing on the fact that Facebook ads have declined in price by 14%, according to Bloomberg Intelligence Senior Technology Analyst Mandeep Singh. \u201cThat tells you they are making their numbers by increasing ad loads,\u201d or the frequency of ads shown to users for each post. If they have to resort to that, then \u201cthey have an engagement problem,\u201d Singh said.<\/p>\n
Meta\u2019s executives sought to reassure investors that Reels is helping increase engagement on its apps – even if it cannibalizes some of the existing products as it grows — and will eventually help with revenue. Reels is currently bringing in advertising revenue at an implied rate of $1 billion a year, the company said.<\/p>\n
Some of Meta\u2019s competitors are also being hit by the slowdown in advertising spending. Alphabet Inc\u2019s Google, the market leader, saw an increase in ad sales, especially in search ads where marketers pay for direct-response advertising. But Snap Inc and Twitter Inc both struggled to meet sales goals; Twitter\u2019s revenue declined.<\/p>\n
To combat the slump, Facebook has tried to rein in costs by slowing hiring and focusing on fewer priorities, like developing its short-form video strategy and its algorithmic recommendation engine.<\/p>\n
The company is still investing in the Metaverse, the immersive virtual-reality world that Zuckerberg thinks we will eventually work, shop and communicate through. But the spending has slowed; some projects, like a watch that could take photos, were shelved.<\/p>\n
The Reality Labs division, focused on virtual and augmented reality, posted revenue up 48% to 452 million, boosted by headset sales. The unit also reported a loss of $2.81 billion, wider than a year earlier.<\/p>\n
The results marked chief operating officer Sheryl Sandberg\u2019s last earnings report; she departs the company in September. Chief financial officer David Wehner will become the company\u2019s chief strategy officer, and Susan Li, the current vice president of finance, will be the new CFO.<\/p>\n
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