Berlin At the start of the year, Facebook owner Meta grew as slowly as it did when it went public ten years ago. Weaker advertising budgets and Apple’s new data protection rules allowed sales in the first quarter to climb by just seven percent to $27.9 billion, as the world’s largest Internet network announced on Wednesday after the US stock market closed. Profits fell by around a fifth to $7.47 billion due to significantly higher spending, including in new employees and investments in products. The number of monthly active users, on the other hand, rose by six percent to 3.64 billion. This means that more than every third person on earth has an account on Facebook, WhatsApp, Instagram or other meta-services.
The number of users grew faster again at the beginning of the year after a slump at the end of 2021. In the first quarter of this year, 1.96 billion users accessed Facebook every day. In the previous quarter, the daily number of users had fallen by a million to 1.929 billion. Despite the small decline, this was interpreted as an alarm signal. At the time, Meta admitted increased competition from the video app Tiktok as a key reason.
On Wall Street, however, the drop in profits and weak growth did not cause any displeasure at first. The paper climbed 13 percent in after-hours trading. However, the share has lost almost half of its value since the start of the year. The group announced that it would reduce costs this year. So far, spending has been estimated at $90 to $95 billion. Meta is now expecting a range of $87 billion to $92 billion.
On Tuesday evening, Google had already disappointed with a weakening advertising business due to the Ukraine war and the global economic slowdown. While Google is by far the world’s largest online advertising medium, Facebook has established itself in second place. During the Corona crisis, both US technology groups benefited from the online boom and the associated bubbling advertising revenue. For the current quarter, Facebook is now a little more confident than for the first quarter and expects sales of 28 to 30 billion dollars. When it comes to spending, Facebook is lowering the bar a little and only wants to spend 87 to 92 billion dollars this year instead of the previously planned 90 to 95 billion dollars.
Most recently, the group founded by Mark Zuckerberg in 2004, alongside competitors such as the ByteDance subsidiary TikTok, was also affected by Apple’s data protection rules. The new operating system for Apple’s iPhone makes it harder to personalize advertising, making it less effective and causing advertisers to pay less.
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