The Facebook group has had a weak quarter.
(Photo: AP)
Cupertino Facebook owner Meta has suffered the first drop in sales since going public in 2012. In the second quarter, revenues fell slightly by one percent to $28.8 billion, as the world’s largest Internet network announced on Wednesday after the US stock market closed. The profit even collapsed by 36 percent to 6.69 billion dollars. This is also related to the higher costs. With around 83,500 employees, Meta currently has around a third more than a year ago.
The group, which includes services such as Facebook, WhatsApp and Instagram, is also skeptical for the current quarter and has a wide range of sales from 26 to 28.5 billion dollars. This means that another decline has been priced in. In the third quarter of 2021, Meta generated almost $28.3 billion.
Meta is also threatened with trouble with the antitrust authorities: US competition authorities are targeting the group’s strong market position in the virtual reality business for the first time. The FTC went to court to prevent Meta from buying a developer company.
With virtual reality, users can immerse themselves in digital worlds with special glasses on their heads. Facebook founder Mark Zuckerberg got into the business early on when he bought VR glasses pioneer Oculus in 2014. The company is now a leading player in the market for glasses and a platform for VR content. Zuckerberg also stated the goal of establishing a virtual world – the “Metaverse” – as a future computing platform. The change in the company name from Facebook to Meta also has something to do with this.
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The company Within Unlimited, which Meta plans to buy, is behind a VR fitness app called “Supernatural”. The FTC argues that Meta with its “VR empire” wants to occupy this market by buying it out instead of competing for it with its own offering.
According to the lawsuit filed on Wednesday, the takeover could lead to less competition and potentially higher prices. “And Meta would be one step closer to the ultimate goal of owning the entire Metaverse.” Meta already owns the motion-focused VR app Beat Saber. The group has bought several VR specialists in recent years. According to a media report, Meta wants to spend more than 400 million dollars on the purchase of Within that was announced last fall.
Meta countered that the FTC’s lawsuit was based on “ideology and speculation” rather than facts. The idea that the acquisition would be anti-competitive is “unbelievable,” a company spokesman told technology blog The Verge.
Under its new boss Lina Khan, the FTC is taking a tougher stance against the big tech companies, which have long benefited from rather lax competition regulation in the United States.
More: The advertising business at Snap is collapsing, dragging down corporations like Meta and Google. Analysts expect further setbacks, but also see opportunities.