![]() Meta has also yet to recover from Apple's 2021 iOS privacy update that made it harder to target users with ads. Zuckerberg still sees it as the company's future.ĭigital advertising, meanwhile, is suffering from a struggling economy, and Li gave no indication that companies are planning to dramatically increase their spending in 2023. Finance chief Susan Li told analysts that the company isn't planning for any reduction in that unit anytime soon. Meta's Reality Labs unit, which is responsible for developing the nascent metaverse, lost $13.7 billion in 2022. Still, Meta has plenty of challenges ahead, in terms of both costs and reviving its core ad business. One of Zuckerberg's top deputies, technology chief Andrew "Boz" Bosworth, wrote a personal essay just a few days ago echoing that sentiment. Zuckerberg is selling investors on a story they want to hear, acknowledging that the company got bloated and needed more financial discipline. In looking to the future, Zuckerberg struck a realistic tone. "And then obviously that changed very dramatically in 2022, where our revenue was negative for growth, for the first time in the company's history." "The first 18 years I think we grew it 20%, 30% compound or a lot more every year," Zuckerberg said on the earnings call. Rather, Zuckerberg's commitment to cost cuts and efficiency is a sign that increasing profitability is important to Meta, which was known as a growth machine prior to last year's slump. And the forecast range for the first quarter suggests that year-over-year revenue could increase, but it could also fall again. Meta reported better-than-expected revenue in the fourth quarter, but sales still sank 4% from a year earlier, marking the third straight quarterly decline. Growth is not what's getting investors excited. Based on after-hours pricing, Meta is trading at its highest since July. Personal Loans for 670 Credit Score or Lowerįollowing a 64% plunge in Meta's share price in 2022, Wall Street cheered the report, sending the stock up almost 20%, extending a rally that began late last year. Personal Loans for 580 Credit Score or Lower With the latest cuts, Meta expects expenses in 2023 to come in between $86 billion and $92 billion, lower than the $89 billion to $95 billion forecast previously.Best Debt Consolidation Loans for Bad Credit Meta has teased AI-powered "creative aids" that can generate images, videos and text but has yet to offer any such products on its apps, even as peers have launched dueling generative AI chatbots and productivity tools in recent months. In his memo, Zuckerberg made scant mention of virtual reality and instead emphasized the company's focus on AI, saying Meta's single largest investment was in "advancing AI and building it into every one of our products." "Virtual reality is an expensive business to be in, so while (Meta) maps out a path through an uncertain landscape, it needs to find efficiencies elsewhere," she added. The latest downsizing indicates "how desperate the company is to get costs under control as its revenues have fallen amid declining marketing budgets," said Hargreaves Lansdown analyst Susannah Streeter. The stock received another boost in February when Zuckerberg dubbed 2023 the " Year of Efficiency," with new cost controls and a $40-billion share buyback. Wall Street has been rewarding Meta steadily since its November restructuring, after its share price fell more than 70% earlier in 2022. The company also has struggled with Apple-led (AAPL.O) privacy changes and competition for young users from short video app TikTok.Īt the same time, Meta has been pouring billions of dollars into its metaverse-oriented Reality Labs unit, which lost $13.7 billion in 2022, and investing in infrastructure to support its artificial intelligence usage. Investors have grown wary of Zuckerberg's prolific spending as revenue growth from Meta's main businesses petered out amid high inflation and a digital ads pullback from the pandemic e-commerce boom. Both changes were initially reported by the Wall Street Journal. ![]() It also disbanded its skunkworks New Product Experimentation team and reassigned leader Ime Archibong to work on product for Messenger, according to an internal memo seen by Reuters. On Friday, Meta said it was exploring " strategic alternatives" for Kustomer, a customer service company it acquired last year. The first of the latest wave of cuts appeared to have started even before Zuckerberg's announcement.
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