Hilary Giorgi

Meta Is Losing Subscribers and Money

According to the report for the second quarter, Facebook ad revenue has fallen, and the number of active users is gradually declining. Many factors contribute to this. One of them is the company considers the difficult economic situation in the world.

High user activity from India (where TikTok was banned) and Indonesia helped Meta get a not-too-poor but still subpar result compared to the previous year. The daily activity indicator increased slightly from the first to the second quarter of 2022. Most of all, the statistics were affected by European users, where the loss of activity is the largest. In Russia, Facebook has about 70 million users, and the company has faced severe restrictions, which also affected its performance.

It is logical that the constant loss of users has affected Meta's revenues, which have become the lowest since 2020 (net profit indicator). However, analysts in their forecasts indicated even lower income.

All these figures were influenced by many factors. The most global was the unstable economic situation in the world, which led to Russia's military invasion of Ukraine. Demand for advertising has fallen, and as you know, Meta receives a significant part of its income from this source. Also, an important factor was the intense competition with popular applications, especially TikTok. Meta is trying to keep its young followers on Facebook and is spending huge sums to block the Chinese platform in the US.

At the moment, Meta cannot significantly influence the factors that provoke the loss of subscribers and income. However, despite all the problems, other apps of the company, such as WhatsApp and Instagram, continue to develop slowly. It is not known when Facebook's ad revenue will offset the losses. Over time, the number of users should recover. How much do you think the competition with TikTok affects Facebook's performance?