End of an Era?? Facebook/META

 

After the recent Market Drop of Facebook/Meta by 26% in one day in Early February 2022 dropping the value of the company by 240 billion the largest single-day value drops of a company in the USA. For the man behind Facebook mark Zuckerberg lost a total of 29 billion. So, what is the reason behind this massive drop, and what’s next for META?

The main reason for this is for the very first time in Facebook's history the company recorded a decrease in users. to understand this, a while back due to the many concerns of Facebook privacy issues and bad publicity many users in the developed world began ditching the company in favor of other social media platforms. This did not really affect Facebook's new user gains due to it thriving in the third world and developing countries. But after a while now, with the emergence of Tiktok and other newer social media platforms, these markets i.e., India, Latin America, and Africa are also recording dips in daily users for Facebook.

Facebook has a huge problem as the young generation is now opting for Tiktok leaving Facebook as the favored social network for the older generation. The main purpose for Facebook nowadays in the younger generation is for their messenger apps i.e., WhatsApp, Messenger, and Instagram direct messages thus avoiding Facebook wall where most of the company’s advertising business comes from, affecting their bottom-line. Also, Apple’s decision to make ad tracking more difficult really affected the business hence the projected revenue was going to be difficult to achieve.

So, do these mean we have seen the highest peak of Facebook now? And how does Facebook mitigate all the internal and external struggles it facing currently from increased competition, bad PR, regulators and government bodies increased interventions and investigations towards the company?

I can’t really say we have seen the peak of Facebook as it is a huge company with many arms and huge resources and something may come up the horizon, or even their META bet may come to fruition soon.

For those not aware Facebook has already invested 8.3 billion in the metaverse and another 3.3 billion in the oculus division. These are huge bets on businesses low on earnings like oculus had revenues of 900million with the hope of increasing in the future. But hope is that all sectors will eventually need the metaverse as seen by the huge growth of Real Estate usage and revenues topping 500million for the past year. Also, Facebook social media users are only decreasing on Facebook the platform, but still recording high user additions in WhatsApp (not a Profitable arm though) and Instagram. They have also added newer features on Instagram the reels as a way to keep up the competition with Tiktok.

It's worth noting that Facebook has lost a whopping 35% in value since reaching its peak of over a Trillion-dollar valuation.

So, what do you think? Will they recover? Or have we seen their highest point?

Will the metaverse work or is it a long-lost Bet?

Only time will tell                                                                                                

Please leave a comment below and share your thoughts