The weak quarterly results raised fresh questions about whether Meta’s plans to spend US$10 billion a year on the metaverse – an idea that doesn’t even exist and probably never will – are wise while its main source of revenue falters. The quarterly results of Meta Platforms Inc. they sent its stock down more than 20 percent to just above $100, a level it hasn’t fallen below since 2016. Before the latest selloff it was already down 61 percent for the year. The Menlo Park, Calif., company earned $4.4 billion, or $1.64 per share, in the quarter ended Sept. 30. Analysts on average were expecting earnings of $1.90 per share, according to FactSet. Revenue fell 4% to $27.71 billion from $29.01 billion. Some of the company’s investors worry that Meta is spending too much money and confusing people with its focus on the metaverse, a concept of virtual, mixed and augmented reality that few understand — while also facing a weakened advertising business. “Meta has drifted into the land of excess – too many people, too many ideas, too little urgency,” Brad Gerstner, CEO of Meta shareholder Altimeter Capital, wrote earlier this week in a letter to its CEO Meta, Mark Zuckerberg. “This lack of focus and fitness is overshadowed when growth is easy but deadly when growth slows and technology changes.” In addition to the accelerating revenue decline, Meta also forecast lower-than-expected sales for the current quarter, further raising concerns that the revenue decline is more of a trend than an aberration. “While we face near-term revenue challenges, the fundamentals are in place to return to stronger revenue growth,” Zuckerberg said in a statement. “We approach 2023 with a focus on prioritization and efficiencies that will help us navigate the current environment and emerge an even stronger company.” From August 3rd: Front Burner24:02 As Meta struggles, Zuckerberg puts employees at gunpoint As the global economy slows, Meta CEO Mark Zuckerberg is pushing employees to step up. The parent company of Facebook and Instagram set a record in February, losing the most stock value in one day in US history. But Zuckerberg has continued to sink billions of dollars into his vision of a “metaverse,” pushing for faster updates to compete with TikTok and increasing pressure on workers. According to reports of an internal Q&A in June, Zuckerberg told employees, “Realistically, there are probably a lot of people at the company who shouldn’t be here.” Today, The Verge’s deputy editor Alex Heath explains the many threats to the Meta that make this the “greatest pressure” it’s ever faced, and how tech struggles are causing an unprecedented shift in its rich culture. Meta said it expects staffing levels to remain about the same as the current quarter. The company had about 87,000 employees as of Sept. 30, a 28 percent year-over-year increase. “To return to stronger growth, Meta needs to change its operations,” said Insider Intelligence analyst Debra Aho Williamson. “As Facebook Inc., it was a revolutionary company that changed the way people communicate and the way marketers interact with consumers. Today it is no longer such an innovative trailblazer.” He went on to say that “Meta would benefit from less priority on the metaverse and more on fixing its core business.” Meta’s Reality Labs unit, which includes its metasystem and virtual reality efforts, had an operating loss of $3.67 billion in the third quarter, compared with a loss of $2.63 billion a year earlier. Its revenue was $285 million. Despite the decline in revenue, some 3.71 billion people logged into at least one of Meta’s family of apps – Facebook, Instagram, WhatsApp or Messenger – up 4% year-on-year.
Facebook again violates election transparency law
In a separate development on Wednesday, a Washington state judge on Wednesday fined Meta $25 million for repeatedly and willfully violating campaign finance disclosure laws, believed to be the largest fine in US history. The sentence imposed by King County Superior Court Judge Douglass North was the maximum allowed for more than 800 violations of Washington’s Fair Campaign Practices Act. Attorney General Bob Ferguson argued that the maximum was appropriate, given that his office previously sued Facebook in 2018 for violating the same law. The Washington Transparency Act requires ad sellers like Meta to maintain and make public the names and addresses of those who buy political ads, the target of such ads, how the ads were paid for, and the total number of times each ad was viewed. Ad sellers must provide the information to anyone who requests it. TV stations and newspapers have been complying with the law for decades. But Meta has repeatedly opposed the requirements, arguing unsuccessfully in court that the law is unconstitutional because it “unduly burdens political speech” and is “virtually impossible to fully comply with.” While Facebook maintains a record of political ads served on the platform, the record does not disclose all the information required by Washington law. The Current30:03 Full conversation with Frances Haugen: Why the whistleblower thinks Canada could lead a coalition to demand change at Facebook In an extended version of Thursday’s conversation, former Facebook employee-turned-whistleblower Frances Haugen tells Matt Galloway why she chose to release thousands of documents about the social media giant and why she believes Canada could lead a coalition of countries demanding change. “I have one word for Facebook’s behavior in this case – arrogance,” Ferguson said in a press release. “He deliberately ignored Washington’s election transparency laws. But that wasn’t enough. Facebook argued in court that those laws should be declared unconstitutional. That’s amazing. Where is the corporate responsibility?” In 2018, after Ferguson’s first lawsuit, Facebook agreed to pay $238,000 and pledged transparency in campaign finance and political advertising. He then said he would stop selling political ads in the state rather than comply. However, the company continued to sell political ads, and Ferguson sued again in 2020.
