Meta’s Total Revenue Increases but Fails to Halt a Declining Trend

Meta has experienced varying degrees of setbacks in the development of AI and Threads. On the left is an image of Threads integrated with Instagram, and on the right is the Meta logo. (Stefani Reynolds/AFP)

Meta, the parent company of Facebook, has witnessed overall revenue growth, but its Metaverse division is grappling with significant financial setbacks. To counterbalance the losses, Meta had set its sights on AI and its new platform Threads, but both faced notable setbacks.

In its recent financial report, Meta announced second-quarter total revenues of approximately $32 billion, marking a 16 percent growth rate, accompanied by a net profit of around $7.788 billion. Advertising showed substantial gains, surpassing the initial market expectations of $31.12 billion projected by Refinitiv, a global financial market data provider.

Prior to achieving this revenue increase, Meta had undergone several rounds of cost-cutting measures, which led to layoffs affecting recruiters, software engineers, and marketing personnel across various departments. These restructuring efforts incurred expenses exceeding $1 billion, covering severance and other related personnel costs.

Meta’s Metaverse Faces Massive Losses

Meta’s virtual reality division, Reality Labs, reported sales of $276 million in the second quarter but incurred operational losses of $3.7 billion. The losses for the first half of this year reached $7.7 billion, while the total losses for the previous year amounted to $13.7 billion.

To mitigate and recover from these setbacks, Meta introduced its own AI chatbot and Threads. However, the outcomes were less than satisfactory, as Meta’s AI development fell behind major players in the tech industry. Consequently, Meta chose to open-source its Large Language Model Meta AI code, enabling other advanced tech firms to enter the arena alongside giants like Google, OpenAI, and Microsoft.

Furthermore, Meta’s unveiling of Threads in early July, referred to as the “Twitter killer” and integrated with the Instagram platform, triggered a swift influx of one hundred million registrations, surpassing even ChatGPT. However, Threads experienced a rapid decline in active users within a month.

According to Similar Web, the web analytics firm, Threads boasted 49 million Android daily active users in early July, whereas Twitter’s active user base exceeded 109 million. By the close of July, Threads’ Android daily active users dwindled to a mere 12.6 million, accompanied by an average usage duration of just five minutes. In contrast, Twitter experienced only a marginal decline, with users spending an average of 25 minutes on the platform.

Although SimilarWeb lacks daily data from Apple’s iOS system, they believe the situation for Apple users would be similar to that of Android users. SimilarWeb also stated that Threads’ initial success was attributed to its integration with Instagram, but its lack of uniqueness led to a rapid loss of users.

Addressing the situation, Meta’s CEO, Mark Zuckerberg, conveyed to employees at the end of July: “Obviously, if you have more than 100 million people sign up, ideally it would be awesome if all of them or even half of them stuck around. We’re not there yet.”

Furthermore, he asserted that this drop-off was within the realm of “normal” fluctuations and emphasized that the user retention rate exceeded the expectations set by Meta’s executives. Zuckerberg conveyed his optimism that introducing a desktop version and integrating search functionality into the application could potentially enhance the user retention rate.

Currently, Threads is accessible in over one hundred countries and regions, yet concerns loom over its compliance with EU regulations, rendering it incompatible for utilization within the European Union. The extensive collection of personal privacy data within the app has attracted a barrage of criticisms centered on privacy.

Previously, Meta incurred a substantial violation of the EU’s General Data Protection Regulation, resulting in a historic fine of 1.2 billion euros ($1.3 billion) imposed by the Irish Data Protection Commission in May. These adversities undeniably pose formidable obstacles to Meta’s operational landscape.

Tokumori Sho, the president of a Japanese high-tech firm, conveyed to The Epoch Times on Aug. 4: “Meta’s downfall will not extend to the entire tech industry because other tech companies haven’t experienced investment failures in the Metaverse like Meta did. This also demonstrates that humans won’t spend all their time in virtual networks.”

Increasing Social Media Interaction With AI Chatbots

Meta aims to boost user engagement on its social platforms like Instagram and Facebook to address the issue of Facebook users being older on average compared to other social media platforms.

To achieve this, they are developing a series of AI chatbots, each endowed with distinct personalities, seamlessly integrated into their community platforms. This move will position Meta to compete against the fast-paced social media platforms favored by the younger demographic.

In a bid to foster the growth of their new language model, Llama 2, Meta has made substantial GPU acquisitions, earmarking investments for generative AI. GPUs are pivotal components for large language models, and the upcoming AI chatbots will be powered by the Llama 2 model.

The integration of AI chatbots into social media serves a dual purpose: not only does it provide practical utility for their AI technology while accumulating valuable data, but it also empowers Meta to vie with other AI-driven tech enterprises. All the while, this initiative caters to the burgeoning fascination with AI among the populace.

During the earnings call on Aug. 2, Zuckerberg mentioned that Meta was building AI-powered products that could help businesses serve their customers and assist employees with productivity-driven assistants. “AI could act as assistants, coaches, or that can help you interact with businesses and creators and more.”

In response, Japanese computer engineer Kiyohara Hitoshi expressed concerns on Aug. 4 to The Epoch Times, saying: “Introducing AI chatbots could seriously hinder users’ reading and experience, making it difficult to distinguish between humans and robots, and possibly lead to negative emotions among users and readers.”

Mr. Sho further remarked: “I am not optimistic about Meta’s AI chatbot project. Social media platforms gained popularity by breaking barriers of time and space. If people are faced with interacting only with robots, it will deviate from the original intention.”

Ravit Dotan, co-founder of the AI Ethics Advisory and Collaboration Responsibility Lab (CAIR) at the University of Pittsburgh, is concerned about data issues. She told the Financial Times on Aug. 1: “Once users interact with AI chatbots, tech companies can access more data, and they can use this data to do whatever they want.”

Facebook Accused of Being CCP Propaganda Platform and Dividing America

Facebook’s role has come under scrutiny, not only for exacerbating political polarization in the United States but also for evolving into a prominent platform for overseas propaganda by the Chinese Communist Party (CCP).

Apart from concerns about personal data and privacy being exploited by big tech companies, there are also worries that the CCP may steal data from these companies and use social media platforms and AI to achieve their world-domination ambitions and increase their influence abroad.

It is no secret that the CCP has been using stolen advanced technology to fulfill its world domination ambitions. Previously, the CCP formulated a plan to surpass Europe and the United States and become the world’s top AI power by 2030.

FBI Director Christopher Wray addressed this matter at a cybersecurity summit in Atlanta at the end of July, stating that most of China’s advanced technology is acquired through theft or other illicit means. Due to “years stealing both our innovation and massive troves of data,” the CCP is well-positioned “to use the fruits of their widespread hacking to power, with AI, even more powerful hacking efforts,” he said.

Another senior FBI official mentioned: “Nation-state adversaries, particularly China (CCP), pose a significant threat to American companies and national security by stealing our AI technology and data to advance their own AI programs and enable foreign influence campaigns.”

In tandem with these concerns, the CCP is leveraging foreign social media platforms, as well as media outlets and platforms such as TikTok, to execute expansive overseas propaganda campaigns.

On July 21, Fudan University’s School of Journalism and its Global Communication and Media Research Institute released the “Global Mainstream Media Network Communication Power Research Report (2023).” This report meticulously examined 222 mainstream media outlets from thirty-three countries and compiled content disseminated by these media through certified Twitter and Facebook accounts over the preceding year.

They also designed an influence evaluation index system to analyze their exposure, interaction, dissemination, and recognition levels within the media communication spectrum.

The findings indicated that the CCP’s overseas propaganda efforts on Facebook were markedly more impactful compared to those on Twitter and other Western social media platforms. Notably, CCP-affiliated media entities such as China Global Television Network (CGTN), People’s Daily, China Daily, Global Times, and Xinhua News Agency ranked prominently, with CGTN securing a position among the top ten on the comprehensive list.

Prominent scientific publications such as Science and Nature have repeatedly highlighted in their articles that, through algorithmic mechanisms during the 2020 U.S. election and the COVID pandemic, platforms like Facebook and Instagram engendered acute political polarization among the American populace, fostering animosity and divisiveness among individuals holding differing viewpoints.

Moreover, Facebook, Twitter, YouTube, and Instagram have vigorously suppressed conservative voices regarding the election results, Hunter Biden’s laptop, and vaccines. They did so by reducing the exposure rate of conservative posts, imposing bans, and deleting accounts to achieve their goals.

Commenting on this matter, Mr. Sho remarked: “Years ago, Zuckerberg tried to please the CCP for business interests and even considered developing a special version to comply with CCP censorship, but he was eventually abandoned by the CCP. Despite that, Facebook is still the social media platform that cooperates most with the CCP’s oversea propaganda, massively spreading fake news to mislead Western audiences.”

In a similar vein, Japanese engineer Kiyohara Hitoshi conveyed: “The CCP’s pervasive propaganda, infiltration, and disruption of societal order are all aimed at ruling and destroying all of humanity. In addition, Facebook’s loose censorship and suppression of the CCP’s messages may lead to the platform being replaced by new ones in the future.”

Epoch Times sent inquiries to Meta on Aug. 5, asking for their views on Facebook becoming a major overseas propaganda platform for the CCP, but no reply has yet been received.