Last week Meta he lost 250 billion dollars on the stock market. In just one day.
A colossal disaster, one of the worst on Wall Street.
The collapse was caused by the decline in profits recorded in the fourth quarter of 2021, which adds to the haemorrhage of users, with about 1 million people leaving the platform created by Zuckerberg every day.
Is it the beginning of the end?
The collapse in revenues: is Apple to blame?
Yes and no.
To explain it to you, however, we must take a decisive step back.
In April 2021 Apple He released iOS 14.5 and, among the novelties, there was also the ATT: App Tracking Transparency. This is a feature, still present on Apple’s devices, which explains to users which applications collect and share their data. So far everything normal. But ATT does more: it allows people to decide whether they want to provide this information or not.
The notice appeared on Facebook after the release of iOS 14.5
Immediately after the release of this version of the Cupertino operating system, Facebook and Instagram started reporting this news to users with a popup, asking them not to block tracking and illustrating the purpose of this data collection. Or? Well, the creation of targeted ads.
Zuckerberg’s social networks are free.
None of us pay any contributions to be free to share thoughts, images and videos. However, the infrastructure costs a lot of money. Then there are the salaries of the employees, the costs of the research and development department and many other expenses that Meta has to face. In short, we cannot expect everything to be free and that no one comes to ask us for anything. It wouldn’t even be fair.
So how does the American company make money? With its advertising platform. In a nutshell: advertisements.
Many companies – more or less large – spend hundreds or even thousands of euros a month to create sponsored content that helps them sell more and, therefore, earn more.
The ATT, and therefore the users’ decision not to provide their data to Facebook and Instagram, pays off more difficult to create targeted ads and this reduces the income of those who rely on the Facebook advertising service.
Let us give you a practical and very extreme example.
Imagine you have a shop that sells fishing rods.
On Facebook, you will create an ad which is then shown to fishing enthusiasts in your area.
At some point, however, users stop sharing their information.
So Facebook no longer knows where they live and can’t find fishing enthusiasts. When in doubt, then the target is enlarged in the hope that, among all the users you target, someone is interested in buying.
You bring some results home but it will never be the same as before.
All of this makes your company earn less. At that point you start wondering if it makes sense to spend all that money on Facebook and decide to reduce your budget or maybe use it for a completely different activity.
This is somewhat of what has been happening to Zuckerberg over the past few months.
So is Apple to blame? As we said at the beginning, Yes and no.
Yes, because the ATT introduced Cupertino, certainly well aware of the consequences. No because Apple’s choice was, once again, to preserve user privacy, which takes on more and more value with the passage of time. Tim Cook’s company therefore decided to protect the people who trust it and it is an extremely sensible approach.
We must also consider that iOS 14.5 came out months ago and it was clear from the beginning that things would take a bad turn for Meta, which however did not feel the need to put in place a plan B. Plan it is thinking about now. , with a new system that would still allow us to obtain good metrics but respecting the users’ desire not to be tracked.
Does it seem a bit smoky? It is but it is understandable. We will probably know more when this technology is actually used.
Users flee Facebook
Mark Zuckerberg
A million users a day is not a few.
At least when viewed in absolute terms.
In this case, however, it is good to compare this figure with other numbers.
In particular Facebook went from 1.93 billion users to 1.929 billion users. La decrease, seen in this way, looks less like a hemorrhage and more like a physiological oscillation.
We then consider that the downturn coincides with a period that saw Facebook face technical problems (for example a down of several hours) and statements by former employees who have once again pilloried Zuckerberg’s social network. In short, seen this way the deletion of some users seems more than normal and justified.
We must then consider that Facebook is no longer “just” Facebook, for a long time. Mark Zuckerberg has built a small empire that also includes Instagram and WhatsApp and that allows him to reach 2.82 billion people every day. And growth general of Meta is continuous and constant.
You understand well that, taking all these elements into consideration, it is difficult to conclude that this is “the beginning of the end”. Also because American society continues to grind money and is preparing to shoot the most precious arrow among those present in its quiver: the metaverse.