Good News: Facebook Had A Terrible Week!

Facebook is losing members which means Mark Zuckerberg is losing money.

By Aaron Mak, Slate

Facebook’s parent company Meta just had an unprecedented, jaw-droppingly bad week. In an earnings call on Wednesday, executives reported that for the first time in its history Facebook had actually lost daily active users in the previous quarter—about a million of them, to be exact. Meta also spent $10 billion on its virtual reality projects, which CEO Mark Zuckerberg has pitched as the company’s future, through the Reality Labs department. In the wake of the dismal disclosure, Meta dropped more than $237 billion in value on Thursday, the biggest one-day loss ever in the U.S. stock market. (That’s more than the market cap of Netflix or Twitter.) Zuckerberg’s own net worth also fell by $31 billion. It was shocking news for a company that has pretty reliably reported solid-to-fantastic numbers in the past, even during periods of scandal and public ire.

The forces working against Meta are formidable and multifarious. During the earnings call, executives specifically blamed a 2021 privacy update that Apple instituted in iOS for hitting Meta’s ad sales by about $10 billion this year. (About 97 percent of Meta’s revenue comes from advertising.) Apple’s update presents users with pop-up notifications asking if they want want to prevent certain apps from sharing identifiable personal information—like location or browsing history—with third parties. A study by the mobile marketing analytics company AppsFlyer in October indicated that 62 percent of iPhone owners who viewed such notifications chose to opt out. Users on iPhone are reportedly more likely to spend money on items that they see in mobile ads. The New York Times notes that, because advertisers are having a tougher time targeting Facebook users now, they’ve been devoting more of their ad budgets to Google instead. Google, which reported record sales on Tuesday, is less reliant on Apple devices for gathering data on its users. Zuckerberg said during the earnings call that Facebook would be rebuilding its ads infrastructure to adapt to this new landscape, though didn’t give many specifics on what changes might be implemented. COO Sheryl Sandberg also said that it would take some time to figure out new ways to serve relevant ads without relying on personal data collection.