Social media giant Facebook has seen its daily active users (DAUs) drop for the first time in its 18-year history, the BBC reports.
Facebook’s parent company Meta Networks says DAUs fell to 1.929 billion in the three months to the end of December, compared to 1.930 billion in the previous quarter.
The firm warned of slowing revenue growth in the face of competition from rivals including TikTok and YouTube, while advertisers are also cutting spending.
Meta’s shares slumped by more than 20% in after-hours trading in New York.
The slide in Meta’s share price wiped around $200 billion off the company’s stock market value.
Shares in other social media platforms, including Twitter, Snap, and Pinterest, also fell sharply in extended trading.
Chief executive Mark Zuckerberg said the firm’s sales growth had been hurt as audiences, especially younger users, had left for rivals.
Meta, which owns the world’s second biggest digital advertising platform after Google, also said it had been hit by privacy changes on Apple’s operating system.
The changes have made it harder for brands to target and measure their advertising on Facebook and Instagram, which could have an impact “in the order of $10 billion” for this year, according to Meta chief financial officer Dave Wehner.
Meta’s total revenue, the bulk of which comes from advertising sales, rose to $33.67 billion in the period, narrowly beating market predictions.
It forecast revenue of $27-$29 billion for the next quarter, which is lower than analysts had expected.
While the company has been making its own investments in video to compete with TikTok – owned by Chinese tech giant ByteDance – it makes less money from those offerings than its traditional Facebook and Instagram feeds.
Zuckerberg said he was confident the investments in video and virtual reality would pay off, as have previous bets on mobile advertising and Instagram stories.
But, he noted, the firm did not have to contend with a major rival during previous shifts in strategy.
“The teams are executing quite well and the product is growing very quickly,” he said. “The thing that is somewhat unique here is that TikTok is so big a competitor already, and also continues to grow at quite a fast rate.”
https://www.bbc.com/news/business-60238565
