Facebook has seen a number of controversies in recent years. But now, the company which was recently brought under new parent Meta, is witnessing a decline in its user base. This has happened for the first time in Facebook’s 17 years of existence that its user base has actually gone down.
According to quarterly report released by Meta, Facebook lost about half a million global daily users in the fourth quarter of 2021 as compared to previous quarter. Though the number is not staggering, compared to its existing user base of 1.93 billion, this is the first low point in the life of the company, which also has instant messaging app WhatsApp and Instagram in its stable.
The Verge reported that the loss in daily active users was steepest in North America (about 1 million), which is also where it earns the most through advertising. Across other Meta apps like WhatsApp and Instagram, the user growth was “essentially flat”, the report further said.
Meta’s quarterly report on Wednesday also posted sharply higher costs but gave a weak revenue forecast, spooking the investors and knocking off almost $200 billion off the valuation of the company.
Meta’s shares fell 22.9 per cent to $249.05 in after-hours trading.
Meta is investing heavily in its futuristic “metaverse” project. It is sort of the internet brought to life, or at least rendered in 3D. Meta CEO Mark Zuckerberg has described it as a “virtual environment” in which you can immerse yourself instead of just staring at a screen. Theoretically, the metaverse would be a place where people can meet, work and play using virtual reality headsets, augmented reality glasses, smartphone apps or other devices.
Meta invested more than $10 billion in its Reality Labs segment – which includes its virtual reality headsets and augmented reality technology – in 2021, contributing to the quarter’s profit decline.
Another problem is the recent privacy changes by Apple, which has made it harder for Meta to track people for advertising purposes, putting pressure on the company’s revenue. For months now, Meta has been warning investors that its revenue can’t continue to grow at the breakneck pace they are accustomed to.