News that the FTC wants to block its acquisition of music VR app Supernatural wasn’t the only piece of bad news for Meta yesterday.
“It was good to see positive trajectory on our engagement trends this quarter coming from products like Reels and our investments in AI,” is the quote from Mark Zuckerberg that opened its announcement. And if that makes you wonder where there was a less-positive trajectory, that’s sharp thinking!
Meta’s quarterly revenues declined year-on-year by 1% – the first such fall since the company went public in 2007 and started publishing regular financials.
Meta also offered a somewhat gloomy forecast for Q3 based on “a continuation of the weak advertising demand environment we experienced throughout the second quarter, which we believe is being driven by broader macroeconomic uncertainty”.
Let’s be clear: Meta is still a huge business, with $29.08bn of quarterly revenues and 2.88 billion daily active users of its family of apps – a figure that rose by 4% year-on-year. However, the wobbly economy is having an impact on that business, and if Meta is catching a cold, speculation will only increase about its rival Big Tech companies.
In separate news, Zuckerberg’s comments in Meta’s earnings call yesterday on the evolution of his apps are worthy of your attention.
“Social feeds are going from being driven primarily by the people and accounts you follow to increasingly also being driven by AI recommending content that you’ll find interesting from across Facebook and Instagram, even if you don’t follow those creators,” he said.
Currently, around 15% of content in Facebook and Instagram feeds are AI recommendations, but: “We expect these numbers to double by the end of next year”.