The advertising activities of the Facebook group Meta were running at full speed last quarter. But now there are signs of an economic slowdown. They say it started the war in Gaza.
Instagram boss Adam Mosseri announced on Wednesday that Threads could also be introduced in the European Union and therefore also in Switzerland in a few months. (more on this below).
How does Hamas terror affect Meta’s business performance?
Facebook company Meta is preparing for the fact that the Gaza war could slow down its online advertising business. Advertising demand weakened at the start of the current quarter, says CFO Susan Li. This coincided with the Islamist Hamas attack on Israel and the start of the Gaza War. The advertising world had already deteriorated after previous conflicts of a similar nature.
How much did Meta earn?
In the last quarter, Meta’s advertising activities were still running at full speed. This gives founder and boss Mark Zuckerberg more freedom to continue investing billions in the development of virtual worlds without upsetting investors.
Quarterly revenue rose 23 percent year-on-year to $34.1 billion last quarter, Meta announced after the US stock market closed on Wednesday. Profit rose to $11.6 billion from $4.4 billion a year ago.
In an initial reaction to the quarterly figures, the price initially rose, but after commenting on the unclear advertising situation it turned negative and lost 3.35 percent in after-hours trading. Meta gave its current quarter revenue forecast an unusually wide range of $36.5 billion to $40 billion.
What does Meta spend the most money on?
The group continues to spend enormous amounts of money developing virtual worlds – the ‘Metaverse’ – and the devices intended for them, such as digital glasses. The Reality Labs division’s operating loss rose to $3.74 billion from $3.67 billion a year earlier. At the same time, sales dropped from $285 to $210 million.
Since the beginning of the year, Reality Labs has posted an operating loss of $11.5 billion. Apps like Facebook and Instagram earned $41.8 billion during this period.
Investors had repeatedly raised concerns that Meta was spending too much money on a technology with uncertain earnings prospects. Doubts intensified last quarter as overall online advertising activity slowed. Zuckerberg had already confirmed that he saw the future in the ‘Metaverse’ and would therefore keep investments high.
What about AI?
Zuckerberg announced that the priority for investments in the coming year will be artificial intelligence, both in software development and computing resources. He reiterated that AI features would change the way Metas apps are used. The group is experimenting, among other things, with chatbots and software that creates images on-the-fly based on descriptions.
And wires?
Meanwhile, Meta’s Twitter alternative Threads appears to be doing better than recent estimates from web analytics companies suggested. Threads currently has nearly 100 million active users at least once a month, Zuckerberg said. However, he did not mention the actual relevant number of daily active users.
He has long thought there should be a platform for public debate with a billion users “that’s more positive,” said Facebook founder Zuckerberg, taking a swipe at top dog Twitter, which was bought by tech billionaire Elon Musk and renamed X. “And if we hold on for a few years, I think we can achieve our vision.”
After launching in July, Threads broke the 100 million registration mark within a few days, but user activity subsequently dropped. Zuckerberg remains convinced that Threads can become a service with a billion users in a few years.
When is Europe’s turn?
Although the app was initially quite spartan, the company quickly added many features, including a web app that can now do much more than just display other users’ messages.
Instagram boss Adam Mosseri now promises that Threads could also be available in the European Union and therefore also in Switzerland in a few months. However, the US group sees legal uncertainty surrounding the new digital laws in the EU and hesitates, citing this fact.
Users also now have the option to search for messages and there is an editing feature that you don’t have to pay for. However, the app will likely not be available in Europe for a while, as Meta is unsure whether stricter EU regulations surrounding the handling of user data can be met.
According to independent observers, automatically linking user data from Instagram and Threads Meta could cause problems.
Threads is linked to Meta’s photo and video service Instagram and can therefore rely on existing connections between hundreds of millions of users.
Sources
- theverge.com: Zuckerberg says Threads has nearly 100 million monthly users
(dsc/sda/dpa)
Source: Watson
I’m Ella Sammie, author specializing in the Technology sector. I have been writing for 24 Instatnt News since 2020, and am passionate about staying up to date with the latest developments in this ever-changing industry.
