In the first quarter of 2024, Meta made $36.45 billion dollars - $12.37 billion dollars of which was pure profit. Though the company no longer reports daily active users, it now uses another metric: “family daily active people.” This number refers to “registered and logged-in users of one or more of Facebook’s Family products who visited at least one of these products on a particular day.”
This quiet, seemingly innocent change to how Meta reports growth is significant insofar as it will no longer have to report its Daily Active or Monthly active users, meaning that the only source of truth in Meta’s growth story is a vague growth metric that could be manipulated to mean just about anything. Three billion “daily active people” across Meta’s “family” combines WhatsApp, Instagram, Facebook, Facebook Messenger (which I’m confident it counts separately), Oculus, and Threads.
So a company that made 12 Billion in profit in one quarter is dying because it’s growth has slowed down/plateaued?
It is more that they are not growing, and that means dying in their business model. By not reporting an accurate metric of user engagement, they are hiding the stagnation or loss. Background logins from apps are likely also hiding the real picture of user engagement. Without active user engagement they lose their revenue, data harvesting and advertising.
So there are signs that they are in a downturn, which will lead to irrelevance and failure.
Once upon a time, after growth companies would shift from a growth stock to a stable stock. Instead of telling wall street “you can make money here” it would mean “you can keep your money relatively safe here”. We apparently don’t do that anymore. Seems like it would have been perfect for them.
That would work if they had a stable business model and produced something everybody needed or wanted, like diapers or alcohol. Their entire business model requires they keep users engaged and user count growing.
People will leave Meta the more Meta tries to make more off of a stagnant userbase, which will death spiral.
Astounding, isn’t it? That’s publicly traded companies for you. The company’s objective is to keep its stock up and up and up. That means shareholders must want to keep buying the stock, which in turn means that the company must demonstrate that its value will keep growing, so that by buying the stock today the shareholders will get a positive return tomorrow.
Of course, the universe is finite and no growth is forever. The end state for such companies is not bankruptcy, at least in the immediate, but, more or less, the IBM fate: a previously uber-dominant mastodon whose market capitalization is now worth maybe one tenth of its modern competitors. The fact that it’s still turning a profit is only secondary: none of the big tech shops want to be the next IBM. Their executives are, after all, mostly paid in stocks.
And that’s how you end up with companies that are making amounts of revenue you and I can’t even comprehend flail in a panic like they’re on the edge of the precipice whenever the technological landscape shifts.
It’s both fascinating and remarkably dumb.
Since it has shareholders, the only way for it to stay in business is ever-increasing growth. Profit themselves aren’t enough. It needs to grow faster and faster so that dividends keep increasing, which is the goal.
Dividends aren’t really the goal for most investors. It’s stock prices they care about.
traditionally a stock price is the net present value of all future dividends. just like a home price is the net present value of all future rent payments. of course its all off the rails now due to extended periods of minimal interest rates and dollar cancer.
Facebook’s capital and access to oceans of customer data sure isn’t going to die, though. Maybe mutate
Looks like you didn’t see them get tucked out of billions in EU courts for profiting off their users data
Yeah, my point is that there are fewer and fewer markets that let the profit off of people this way. Either they die or they find an ethical way to make money, that doesn’t violate peoples data rights.
We’re Watching Facebook Die
It’s not happening fast enough.
All I need are good alternatives to:
- find or coordinate local events
- post used things for sale
and Facebook is totally irrelevant to me. The way people switched from Kijiji to Marketplace absolutely screwed me over for leaving Meta.
I was very disheartened to see people switch from Kijiji (Canada). However I thinj it depends on what you’re looking for and where you are. I’ve checked Marketplace with my partner’s account and at least for where I live and my hobby Kijiji is still used.
Absolutely, I’m in QC and we had a couple of way to sell things, lespac, kijiji, etc. but Marketplace is now 100% the king of it, it’s quite incredible especially in big city like Montréal. Others platforms to sell are quite dead.
The other thing I’m using FB for, is groups, that replaced good old web forums… On FB there’s group of everything, costco addicts, dollarama addicts, plants addicts, with ten of thousands of locals people.
Don’t be dissuaded by the weak opening argument - finish the article. At least:
When you look at Instagram or Facebook, I want you to try and think of them less as social networks, and more as a form of anthropological experiment. Every single thing you see on either platform is built or selected to make you spend more time on the app and see more things that Meta wants you to see, be they ads, sponsored content, or suggested groups that you can interact with, thus increasing the amount of your “time spent” on the app, and increasing the amount of “meaningful interactions” you have with content. …
… the logic here is that the more stuff there is on Facebook or Instagram, the more likely you are to run into something you’ll interact with, even if said interaction is genuinely bad. Horwitz notes that in April 2016, Meta analyzed Facebook’s most successful political groups, finding that a third of them “routinely featured content that was racist and conspiracy-minded,” with their growth heavily-driven by Facebook’s “Groups You Should Join” and “Discover” features, algorithmic tools that Facebook used to recommend content. The researcher in question added that “sixty-four percent of all extremist group joins are due to our recommendation tools.”
When the researcher took their concerns to Facebook’s “Protect and Care” team, they were told that there was nothing the team could do as “the accounts creating the content were real people, and Facebook intentionally had no rules mandating truth, balance or good faith.” …
Society’s mechanisms are far too slow and lack the precision to deal with Mark Zuckerberg — a man that acts with a lack of morality that I find putrid — and the complex machine he’s used to torture humans for profit and power. And as I’ve mentioned before, Mark Zuckerberg can never be fired. We’re stuck with him forever. He can — and will — run this company into the ground.
While Elon musk is a greedy and churlish executive, and a disgusting, shameful man, Mark Zuckerberg is something entirely different. He is far from stupid, and unlike Musk seemingly feels no compulsion for anyone to like him. He craves numerical dominance, at any cost. He must force human beings to use Facebook, and once they are there, he must make them move in the way wishes and do the things he wishes all so that he can see the number go up.