Facebook Loses Nearly $200 Billion, 1st Drop in Users in Company History

By Naveen Athrappully
Naveen Athrappully
Naveen Athrappully
Naveen Athrappully is a news reporter covering business and world events at The Epoch Times.
February 3, 2022 Updated: February 3, 2022

Meta shares have lost more than a fifth of their value as the company is struggling to retain users.

Registering the first sequential loss of customers in the company’s 18-year history, Meta Platforms, earlier known as Facebook, dropped to 1.929 billion daily users from 1.93 billion users in the previous quarter. User growth across Whatsapp and Instagram was also lackluster, resulting in the share price dropping by 20 percent, losing the company nearly $200 billion in market value, which is more than the combined market value of other big tech platforms such as Twitter, Pinterest, and Snapchat.

Revenue for the first quarter is expected to be between $27 billion and $29 billion, according to an earnings report published on Feb. 2, while analysts had expected the number to cross $30.15 billion. Although this is between 3 percent and 11 percent year-on-year growth, the company expects “growth in the first quarter to be impacted by headwinds to both impression and price growth.”

Young people have largely moved away from associating with the brand and lean toward more interactive platforms. Facebook also has a reputation for censoring right-of-center perspectives ranging from major media outlets to individual influencers.

Suppression and censorship of information while promoting specific viewpoints hasn’t helped with a growing distrust of the platform. The drop in Facebook’s engagement has been accompanied by the rise of several alternative platforms, such as Gab, Parler, MeWe, Telegram, and Rumble, among others.

Facebook’s rebranding to Meta hasn’t eliminated the core issues plaguing the company, though the tech giant points to “macroeconomic challenges like cost inflation and supply chain disruptions,” which are “impacting advertiser budgets,” besides foreign currency exchange rates and regulatory changes to Apple’s iOS.

Apple’s App Tracking Transparency reduces precise targeting of Apple’s users by disabling confirmation of sales or downloads and other identifying features.

“We believe the impact of iOS overall is a headwind on our business in 2022,” Meta Chief Financial Officer Dave Wehner said on a call with analysts after the company’s fourth-quarter earnings report. “It’s on the order of $10 billion, so it’s a pretty significant headwind for our business.”

The other reason given by the company for the disappointing performance was the difficulty to monetize Instagram Reels, toward which more users are shifting their attention. According to the company, Reels “monetize at lower rates than Feed and Stories.”

Shares of Twitter also fell by more than 7 percent, while Snapchat fell by nearly 20 percent. Pinterest dropped by more than 10 percent, but has managed to pick up some of its value during the Feb. 3 early morning trade.

Meta has invested more than $10 billion in building its 3D platform, related infrastructure, and hiring more talent, which has also contributed to the rise in costs for the company. Meta’s workforce surged by 23 percent in 2020, ending 2021 with 71,970 employees.

“I’m encouraged by the progress we made this past year in a number of important growth areas like Reels, commerce, and virtual reality, and we’ll continue investing in these and other key priorities in 2022 as we work towards building the metaverse,” Mark Zuckerberg said in the report.

Naveen Athrappully is a news reporter covering business and world events at The Epoch Times.