(San Francisco) Meta (Facebook, Instagram, WhatsApp) posted $5.7 billion in net profit in the first quarter, down 24% year on year, but better than market expected, after massive layoffs and in an unfavorable economic environment.
According to its earnings release published on Wednesday, the Californian group saw its turnover increase slightly over the period, to 28.65 billion dollars, after three consecutive quarters of decline.
Its stock rose about 10% in electronic trading after the close of the New York Stock Exchange.
“Meta has started to recover from the disaster that was 2022, but it remains in bad shape,” commented Insider Intelligence analyst Debra Aho Williamson. “It’s a shadow of itself compared to the company that has established itself as a digital leader for the past 15 years. »
In 2022, the Californian group experienced two firsts since its IPO in 2012: its advertising revenue declined and Facebook lost users (before regaining them).
Meta revenues are hurt by shrinking advertiser budgets due to inflation (and rising interest rates), competition from TikTok and regulatory changes from Apple, which are limiting network capabilities social media to collect user data allowing them to sell ultra-targeted advertisements.
Not to mention Amazon, underlines Debra Aho Williamson.
“Advertisers want to communicate with consumers where they shop, for greater efficiency. Advertising spaces on online sales sites are perfect for this. Meta must react to this threat,” the analyst explains.
“In addition, its reorganization and cost-cutting efforts are increasingly messy. Employees are discouraged. Meta risks losing the sense of innovation that propelled it to this level,” notes Debra Aho Williamson.
Faced with macro-economic constraints, Mark Zuckerberg, the group’s boss, declared at the start of the year that 2023 would be “the year of efficiency” and that society would thus become a “more pleasant” place to work for people. employees, because “they will be able to accomplish more things”.
Meta therefore launched new layoffs in March, reducing the workforce by almost 25% in less than six months. The company had so far never launched a social plan in 20 years of existence.
At the same time, the group must invest in artificial intelligence, the current darling of tech, while Reality Labs, its branch responsible for developing the metaverse, lost nearly 4 billion dollars in the first quarter. It has already recorded net losses of 13.7 billion in 2022.
Mark Zuckerberg had renamed the Facebook group to Meta at the end of 2021 to give the company a new direction, towards more augmented and virtual realities, but the enthusiasm died down in 2022.
The Facebook and Instagram networks are seeking to diversify their sources of income with “Meta Verified”, a subscription starting at $12 per month, launched in March to authenticate your account on these platforms and benefit from other privileges.
Meta is also working on a new social network, the description of which evokes Twitter, in full upheaval under Elon Musk.
“We are thinking about a decentralized and independent social network allowing to share written messages in real time”, confirmed Meta to AFP last month, after information from the specialized site Platformer.
More than 3 billion people around the world use at least one of the group’s platforms every month: Facebook, Instagram, Messenger and WhatsApp.
