6 Problems facing the Facebook empire the first of which is the magic of TikTok

Formerly known as Facebook, Meta is taking its biggest one-day loss ever, with its shares on Thursday in a 26% decline and its market value collapsing by over $230 billion.

Its collapse came in the wake of a sad earnings report released Wednesday when CEO Mark Zuckerberg explained how the company was making a difficult transition from social networking to the so-called virtual world of the metaverse.

A report released by the “New York Times” revealed six problems facing Facebook in a difficult situation, compared to other applications of social networking.

TikTok dilemma

The magic of TikTok and its China-fueled growth has brought over a billion users to the back of short posts highly shareable and strangely compelling videos (Reels).

Meta cloned TikTok using a video production feature called Instagram Reels. Zuckerberg said Wednesday that Reels, which was entered in Instagram was the first interaction engine via the app.

Also, the problem is that Reels, while attractive, doesn’t monetize in as effectively as other Instagram features, such as Stories and Main Feed.

This is because they are slower to make money than video ads, as people tend to skip them. This means that the more Instagram pays people to use Reels, the less money they can make from those users.

Limited Users

In parallel, user growth has reached its limit, as the days of massive Facebook user growth are over and they are no longer what they used to be.

Although the company posted modest gains from new users on Wednesday in its so-called application family, which includes Instagram, Messenger, and WhatsApp, Facebook lost around half a million users in the last quarter of the previous quarter.

Apple updates

In the same context, the updates made by Apple, in particular, the “transparency of app tracking” to your operating system mobile, gave iPhone users the ability to allow apps like Facebook to track their activities online.

This has resulted in a reduction in advertising, which is one of the company’s main revenue streams.

Google steals the ads

David Weiner, CFO of Meta, pointed out that the updates mentioned earlier by Apple have provided advertisers with less information about user behavior, as many advertisers have started moving their own budget advertisements to other platforms, mainly Google.

Crazy expense for metaverses

Another reason Facebook is like this in difficulty is the crazy and huge expense for metaverses, as Zuckerberg believes that the next generation of the internet, which includes people browsing in different worlds of virtual and augmented reality, is worth the expense.

Spending reached over $ 10 billion last year, and Zuckerberg plans to spend more in the future.

Antitrust

The biggest difficulty is the antitrust attempt: the threat from Washington regulators to Facebook is a headache that never goes away for its CEO.

The company faced multiple investigations, including by the Federal Trade Commission and several state attorneys general, to determine if it had acted in an anti-competitive way.

Lawmakers have also united around Congressional efforts to pass antitrust laws.

But the threat of antitrust action has made it more difficult for Meta to enter the new trends of the social network.

In the past, Facebook has bought Instagram and WhatsApp with little attention, as these services have gained billions of users.

Now also some of the apparently less controversial meta-acquisitions in VR and GIF have been challenged by regulators around the world.

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