San Francisco The term that the Facebook board of directors used the most to describe its economic situation is actually a foreign word for the growth-spoiled digital company. Facebook is currently experiencing “headwind”, said company boss Mark Zuckerberg when presenting the figures for the third quarter on Thursday.
But the manager was not referring to the public debate about the allegedly questionable corporate culture that is currently being waged mainly in the USA. But a software update from the smartphone manufacturer Apple, because of which Facebook can no longer collect a lot of usage data from iPhones and use it for individualized advertising.
As a result, Facebook revenues fell short of expectations between July and September. With quarterly sales of around 29 billion US dollars, the result was just below the previous quarter. Analysts had expected sales between 29.6 and 30.2 billion US dollars.
But Facebook earned better than expected: Thanks to an operating margin, the group was able to close the quarter with a period surplus of around 9.1 billion US dollars. For the coming fourth quarter, CFO Dave Wehner forecast sales between 31.5 and 34 billion dollars.
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Wehner deliberately remained vague with the broad range. It is still unclear exactly how the Apple update will affect the Christmas business, in which Facebook typically earns a lot of money with ads. In addition, many customers are suffering from a lack of material in the current economic situation, which is also likely to have a negative effect on the advertising volume.
AI should help
In the case of the Apple update, Facebook wants to take more countermeasures – and use artificial intelligence (AI), for example, to gain additional knowledge about its users in order to increase the accuracy of its target group-specific advertisements again. But this is a long-term project, said Facebook’s Chief Operating Officer, Sheryl Sandberg.
Another project is of greatest importance to Zuckerberg. The head of the company wants to build a “Metaverse” in the coming years and realign the company for this goal. More details are expected on Thursday. Then the new name for the group will also be announced.
However, Zuckerberg has already announced that it will invest billions in the project. In the current year alone, profits should therefore be reduced by around ten billion US dollars. “We will increase investments in the years to come,” said Zuckerberg. This should create 10,000 new jobs in Europe alone.
It’s also an attempt to hedge against future difficulties like software updates from device manufacturers that potentially threaten Facebook’s business model. Because the metaverse should be more than just a social network that moves into virtual reality. Zuckerberg spoke of an “ecosystem” made up of hardware, software and digital content.
Problems with younger users
In addition to the VR glasses manufacturer Oculus Rift, the around 3.58 billion users who, according to the company’s surveys, log in at least once a month on one of the Group’s platforms, i.e. on Facebook, Instagram or WhatsApp, should also contribute to the success of the vision.
The majority of this is still attributable to the parent platform, which has around 2.9 billion monthly and around 1.9 billion daily users. Most recently, the group had to deal with stiff competition from younger users in particular, including the Tiktok and Snapchat platforms.
In the course of the publication of internal Facebook documents by the whistleblower Frances Haugen, it became known that the number of daily users between the ages of 18 and 24 had been eroding for several years. The development is threatening – and there are great concerns that Facebook could lose its importance as the largest social network in the world.
It wouldn’t be the first time an online giant has seen an abrupt crash after a meteoric rise. On the stock exchange, however, there seems to be little concern about it: in the aftermath of the hours, Facebook shares rose by around 1.2 percent despite disappointed analysts’ expectations.
More: New company name and a metaverse: Facebook wants to score with a new strategy