According to a recent report, despite a revenue drop, the social media giant is still making billions of dollars.
In a recent report by Bloomberg, Mark Zuckerberg has “attempted to present Meta Platforms Inc., formerly known as Facebook, as an underdog.” According to the article, Zuckerberg has painted a picture of “a company in crisis.”
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The story states that Facebook’s revenue growth accelerated dramatically during the global COVID-19 pandemic with users spending more time online. The Bloomberg articl further states that in the second quarter of 2019, the company reported year-over-year revenue growth of 28% and two years after, the figure doubled to 56% and Zuckerberg shared that Meta was entering one of the “worst downturns that we’ve seen in recent history.” In a July 27 message he said, “I try to push the company to be one that learns faster and just keeps iterating.” “The moment that we stop doing that, then we’ll basically fall behind. It’s a very competitive field.”
According to Max Chafkin, writer of the Bloomberg piece, there are reasons for pessimism about Meta. First, people are returning to pre-Covid online consumption. Second, Meta has predicted a hit of $10 billion this year as a result of changes in Apple Inc.’s privacy that has undermined a key aspect of Meta’s targeted ads business. Third, is Facebook’s reputation of being “deeply uncool or downright creepy”despite efforts of rebranding the company for the meta verse. He cites that Instagram users are “demanding the company to make Instagram Instagram again.” These have resulted in a 50% stock plunge since February.
Chafkin also writes that last quarter, for the first time in history, Meta reported a revenue drop. However, this was only a 1% decrease from the same period in 2021 and more than 70% better than the second quarter of 2019, while Facebook still earning $29 billion in revenue with a $7 billion profit. So, according to the writer, “It’s not time to feel sorry for the social media giant.”
Banner photo via Instagram @zuck.
