The rapidly slowing down economy has also hit Meta’s revenue. For the first time in a decade, Facebook’s nonstop revenue growth has come to an end. The social media giant’s parent company Meta, has reported a revenue of $28.8 billion with a 1% drop in Q2. The overall profit fell about 36 percent to $6.7 billion.
It is being said that, a troubling economy, internet blocks related to the war in Ukraine and Apple’s “Ask app not to track” prompt on iPhones are the major reasons behind this revenue decline. Apple has made many ad companies ads much less effective by adding the Ask app not to track prompt. Also the economic slowdown is making advertisers to pull back their ad spending.
On a call with analysts, Zuckerberg said that the percentage of content people see in Facebook and Instagram that comes from accounts they don’t follow will more than double next year. Building the AI needed to make that happen is a costly investment, he said.
He also said that the company had seen “engagement trends” that were stronger than they anticipated on Facebook. An increase of consumption of videos (reels) are monetizing faster. Facebook introduced short-form videos after the ban of TikTok in multiple countries. The company is expecting reels to drive more revenue in a long run.
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