Meta’s declining revenue was especially stark given that as recently as 2019, its quarterly revenue growth was 28%.
For years, Facebook’s sales grew without fail and kept on growing, defying the laws of gravity even as the company was battered by scandals over privacy and misinformation.On Wednesday, Meta, the company formerly known as Facebook, reported a 1% decline in quarterly revenue from the previous year.
The company attributed its most recent lackluster financial results to weaker demand for digital advertising and the broader economic uncertainty. That pain is unlikely to end soon. For the current quarter, Meta said it expected “a continuation of the weak advertising demand environment.” E-commerce ads were waning as “peak pandemic” had passed and more people ventured outside, the company said, adding that tough periods like these were “cyclical” historically.
It is also staring down the barrel of one of its toughest competitors in TikTok, the Chinese-owned video app that has captured the attention of more than 1 billion people in just a few years. Zuckerberg has begun to shift his company’s products to mimic TikTok’s offerings, including making sweeping changes to Instagram and Facebook.
Zuckerberg said that he was encouraged by other areas of Meta’s business that are driving growth and engagement, like the Reels video product, a feature within Instagram that is similar to TikTok’s video offering. Investments in artificial intelligence recommendation algorithms had also driven more people to use the service and for longer periods, the company said.
Meta also said that David Wehner, the chief financial officer, would become chief strategy officer, a new position that also oversees corporate development. Susan Li, who serves as vice president of finance at Meta, will become chief financial officer.
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