Apple’s policy has shown the company the importance of having its own ecosystem to reach the customer.
At the same time, Meta can also focus on internal changes that are required. The crashed market capital might also help Meta to get out of the scope of the upcoming American antitrust bill for online platforms, which will keep a watch on high market capital companies and their practices to acquire competitors. While tech competitors such as Alphabet and Amazon showed growth in revenue, this collapse in Meta stock created a perception of value among investors. While the stock plunged, a few investors started considering Meta a “value” investment. However, these effects have also given Meta a helping hand. If the resulting changes are unfavorable for Meta, then it will affect its second-largest revenue-generating geography (~25% revenue in 2021). Meta foresees similar developments in various regions as the law evolves and amends. In 2020, Irish Data Protection Commission (IDPC) concluded that Meta’s contractual agreements for data use in Ireland do not align with GDPR and should be suspended. The individual countries within the EU are also developing regulations based on the GDPR. The European authorities are watchful of the data, as they consider it has the potential to become a national security issue or privacy issue for citizens. The GDPR created a set of guidelines for the collection and processing of personal data from individuals within the European Union. The General Data Protection Regulation (GDPR), the European law that governs transatlantic data movement from Europe, forms a huge challenge for Meta. As consumers are becoming aware of their data privacy, this suggestion can hamper the user perception if not addressed promptly. Recently, this body advised Meta to tighten rules on doxing, an act of publishing private or identifying information of an individual. To deal with challenges surrounding user privacy, Meta created the Oversight Board, an independent body that oversees the content published on Facebook and Instagram. Meta has always encountered difficulties with user privacy. This estimated revenue loss also underlined the high dependency of Meta platforms on other companies’ decisions. For context, advertising revenue accounted for 97% of the company’s revenue in 2021. Given the new privacy policy, advertisers will be unable to track consumer digital habits and use this data to target them with ads for products they might be interested in. In the last earnings call, Meta estimated a loss of $10 billion in advertising revenue in 2022 due to the new policy by Apple. According to the new privacy policy, Apple has made it harder for apps to track data for iPhone users. Meta has struggled to capture the market share of these players in short-video content territory.Īpple’s new privacy policy also affected the company’s revenue. YouTube Shorts, a short-video platform by tech giant YouTube, reached the milestone of 15 billion daily views in a year after launch.
TikTok ( ByteDance), a short-video platform company, has already garnered 1 billion users on its short-video platform. Meta launched a short video product on its platforms to tackle the user growth stagnation, but it experienced fierce competition.
Another major reason Meta attributes its slow growth to is the competition from new market entrants. The company expects this rate to decline further as the active user base increases to the levels from where new user addition would look considerably smaller. Meta reported a stagnant daily active user growth rate in the fourth quarter of 2022. Now, with the evolving data protection regulations in Europe, Meta is rethinking its presence in Europe. On February 3, 2022, Meta shares fell 26%, the worst one-day loss ever, after the company provided a weaker-than-expected revenue outlook.
#Staff focus products meta stock plunges series#
While 2021 ended on a high note, with Facebook rebranded as Meta and the launch of the Metaverse concept, the new year brought a series of unexpected downturns for the company. February 2022 was particularly not favorable for Meta.
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