Facebook reports drop in revenue growth for the first time in 10 years

Facebook reports drop in revenue growth for the first time in 10 years

For the first time in a decade, social media behemoth Facebook has announced a 1% decline in sales at USD 28.8 billion during Q2 and expects this trend to persist throughout Q3 of this year as well. Even Meta’s profit dropped 36% to USD 6.7 billion.

Reality Labs, a division in Meta that is responsible for driving Mark Zuckerberg's ambitions for the metaverse, also lost USD 2.8 billion during the second quarter. Although this first-ever decline in revenue growth was anticipated by Wall Street analysts, it reveals how difficult it has become for Meta to conduct business on all fronts.

Notably, Meta lost USD 10 billion in advertising income within a single year due to Apple’s strict policy that prevents an app from monitoring iPhone users.  Several advertisers were also found to have been reviewing their expenditure because of the unstable economic conditions.

Meanwhile, Meta has been redesigning Instagram and Facebook to focus more on short videos and posts to better rival TikTok. In a conference call with analysts, Zuckerberg predicted that over half of the content users view on Facebook and Instagram will come from profiles they don't follow by the end of the year, a topic that has been heavily criticized by users lately.

On a positive note, Meta was still able to grow Facebook's daily users by 3% to 1.97 billion, reversing a huge user drop it had observed in the last quarter. According to the company, Messenger, Facebook, WhatsApp, and Instagram are used by approximately 2.88 billion people regularly, up 4% over the previous year.

 Zuckerberg mentioned that the company has been witnessing "engagement trends" on its platform that turned out to be "stronger than the company anticipated." Reels, Instagram’s short-form video feature that is quite like TikTok, is generating more revenues quickly than Facebook/ Instagram Stories.

Zuckerberg expects Facebook to emerge from this drop in revenue in stronger and a more disciplined manner.

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Rashi Thakkar

Rashi Thakkar

Rashi started her journey in content when she was completing her MBA. Since then, she has helped well-known startups and businesses boost their online presence. Currently Rashi pens downs insightful articles for AlpenHornNews and various other websites, covering an array of sectors from finance and business to technology and healthcare.