Trouble in the Metaverse: Why is Facebook losing daily users?

Facebook, once the
effective champion of the social network, is losing daily users for the first
time in its 18-year history. The social media network, whose parent company was
rebranded Meta last year, has seen global daily active users drop from 1.93 billion to 1.929 billion, reports Reuters.

The fourth quarter
saw Facebook report 2.91 billion monthly active users, showing no growth from
the third quarter. Meta is the second-biggest ad platform in the world after
Google. The company had warned its advertising division of volatility in the last
quarter.

Impact on
business

Tech shares have
been on the slump for the greater part of the year. On Wednesday, Meta saw its
shares drop 20% after it posted its forecast. The cause of the slump, according
to Meta, is the changes made by Apple in its privacy policy.

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Nearly $200
billion worth Meta shares vaporized Wednesday after the tech giant shared its
report. However, Meta was not the only company to see a slump. Google-owner Alphabet
Inc’s shares were around 2% Wednesday after the search engine giant posted
quarterly sales records Tuesday.

Apple concerns

While tech
observers cite numerous reasons for Facebook’s recent slump, Meta believes its troubles
emanate from the privacy policy changes made by Apple, the California-based
tech giant that deployed an update recently to limit digital advertisers from
tracking its users.

Also Read | India slams Google, Twitter, Facebook for inaction on fake news, seeks stricter action

Owing to the
update to its operating system, Apple users now have the choice to either allow
or disallow companies to track users across social media platforms. This has an
immense impact on ad-reliant tech companies, the likes of Facebook.

Dave Wehner, chief
financial officer of Meta, told analysts that the impact of Apple’s privacy
changes in 2022 could be “in the order of $10 billion.”

Days of glory
over?

Another critical
aspect hurting Facebook’s business is the emergence of newer, more
video-friendly apps in the market. Instagram, Facebook’s younger cousin, has
seen its reels turn into the primary mode of communication on the network.
Further, TikTok and Snapchat have emerged as strong competitors.