Facebook’s parent company, Meta, reported its first decline in revenue, joining fellow tech companies in struggling to adapt to shifting economic forces.
The company earned $28.8 billion in quarterly revenue, according to the quarterly earnings report released on Wednesday, a 1% drop, the first such decline in its history.
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Meta reported that its user base grew 3% to 1.97 billion users. The company also posted a net profit of $6.7 billion, the third quarter in a row in which Meta’s bottom line has dropped.
Meta’s struggle to maintain its growth rate reflects the company’s adaptation to the digital advertising market. Meta is also going through a notable amount of change to its platform and leadership. The company decided to overhaul its Facebook feed design to divide its mobile home page into two tabs in an attempt to resemble its competitor TikTok. Meta Chief Operating Officer Sheryl Sandberg and Trump-backing tech investor Peter Thiel also left the company in the last quarter as the company shifted toward a focus on the Metaverse.
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Instagram has also undergone a few notable changes, including focusing on video, which attracted the ire of several users, including influencers Kylie Jenner and Kim Kardashian, who urged the company to stop its pivot toward resembling TikTok. Meta’s head of Instagram, Adam Mosseri, addressed these concerns in a video, stating that the software’s features were evolving and moving away from its initial focus on image-based social media.
Microsoft and Google failed to match Wall Street’s estimates for the quarter. Twitter, Tesla, and Snap also saw their revenue drop in the second quarter. While many of these companies’ struggles are affected by several unique variables, they are also struggling to adapt to the high rates of inflation.
