Meta’s profit slips as Facebook says it’s losing 1m users daily

Facebook’s parent firm Meta on Wednesday delivered a gloomy mix of a sharper-than-expected drop in profit, a decrease in users, and threats to its ad business that plunged shares some 22 percent in after-hours trading.

Already jittery markets have punished pandemic-era darlings including Netflix for disappointing results, with Meta getting a taste of that after its $10.3 billion quarterly profit and daily user-growth fell short of expectations.

Yet the signature Facebook platform also reported losing roughly one million daily users globally between the last two quarters of 2021 — a tiny number on an app with nearly two billion daily users, but a potentially worrying signal of stagnation.

CFO Dave Weiner told analysts that user growth was impacted by “headwinds” including disproportionate growth in the Asia-Pacific during the pandemic that has slowed and an increase in mobile data prices in India.

“In addition to these factors, we believe competitive services are negatively impacting growth, particularly with younger audiences,” Weiner added.

The company’s executives have repeatedly referred to competition from TikTok but also from other networks, while they face numerous probes and complaints of abuse of dominance.

Analysts expected 1.95 billion daily active users on Facebook, but Meta reported 1.93bn — a key indicator of the growth trajectory for a company fueled by the people who choose to interact with its platforms.

On the financial side, Meta achieved a turnover of $33.67bn, in line with its forecasts, but it made $10.3bn in net profit in the fourth quarter, eight per cent less than last year.

As an explanation for the disappointing performance, Meta noted competition and supply chain difficulties suffered by its customers, the advertisers.

Meta’s share price was down about 22pc to roughly $250 at 0010 GMT in after-hours trade.

At the same time, the company said the rules imposed by Apple last year on ad targeting had a negative impact on its financial results in the fourth quarter.

In the update of iOS, its mobile operating system, Apple required application publishers to ask permission before collecting data, much to the regret of companies like Meta that rely on that information for ad targeting.

“Meta may only generate single-digit revenue growth. And that’s before any further legal and regulatory developments and actions,” Third Bridge analyst Scott Kessler said.

“It seems that many are re-evaluating in real-time,” he added.

As of December 31, 2021, 2.8 billion people were using one of its four platforms and messenger services at least once a day, and 3.6 billion at least once a month.

Metaverse cost

These are the first results released since the company’s name change in late October, which was both a turn toward the metaverse vision and a turn away from its scandal-prone social media empire.

The Silicon Valley giant’s whistleblower crisis last year highlighted accusations that executives prioritized growth over keeping their billions of users safe.

Scathing news reports based on internal documents leaked by ex-employee Frances Haugen rekindled long-deadlocked regulation efforts, but US lawmakers have made little progress since.

An activist group calling itself The Real Facebook Oversight Board seized on the results to warn of what may come next.

“Facebook appears to now be feeling the impact on ad revenues from Apple’s new privacy-first approach,” the group’s statement said.

“This will no doubt make them more desperate to drive ad revenue by any means necessary,” it added.

Meta is betting heavily on its belief that the metaverse is the next major evolution of how humans live with the internet.

In this future that evokes science fiction, the public will use augmented reality glasses and virtual reality headsets to find their way around, work or play.

But its construction means tens of billions of dollars of investment in the Facebook Reality Labs branch, without any benefits for a long time.

“There’s a lot of uncertainty about Meta’s investments in the metaverse and if or when they will have a positive impact on the company’s bottom line,” said analyst Debra Aho Williamson.

UAE says it blocked drone attack, the little-known group claims responsibility

The United Arab Emirates said it intercepted three drones that entered its airspace over unpopulated areas early on Wednesday in the fourth such attack on the Gulf commercial and tourism hub in the past few weeks.

The first three assaults, including a missile attack on Monday during a visit by Israel’s president, were launched by Yemen’s Iran-aligned Houthis in an escalation with a military coalition led by Saudi Arabia and which includes the UAE.

The Houthis have not yet announced a new operation and Wednesday’s drones attack was claimed by a little-known group calling itself the “True Promise Brigades”, according to US-based SITE Intelligence Group.

The group’s only other claim was in January 2021, when it said it launched a drone at Saudi Arabia, which is locked in several proxy conflicts with rival Iran, including in Yemen.

The UAE defense ministry said it was “ready to deal with any threats” and was taking “all necessary measures” to protect the country which prizes its reputation as a safe business haven.

On Tuesday, the United States said it was sending fighter jets to assist the UAE after the attacks, one of which was aimed at a base hosting US forces and followed a Jan. 17 strike that killed three people in Abu Dhabi.

The unprecedented attacks on the US-allied country are an escalation in the seven-year Yemen war.

The Houthis had focused on cross-border assaults at Saudi Arabia but extended them to the UAE last month after Emirati-backed local forces joined fighting against the group in energy-producing regions.

If confirmed, the claim by the “True Promise Brigade” could indicate an upswing in violence involving militias seeking to help ally Iran oppose Western and Gulf Arab adversaries, according to some analysts.

“If Alwiyat al-Waad al-Haq came out of hibernation and did launch drones at the UAE … then this was likely an Iran-directed or at very least Iran-tolerated operation,” Michael Knights at The Washington Institute for Near East Policy said in a Twitter post, using the group’s Arabic name.

Sunni Muslim Gulf powers have called on global powers trying to salvage a nuclear pact with Iran to also tackle Shi’ite Iran’s regional proxies and missiles program.

Tehran has not directly commented on the UAE attacks but has called for a political solution to the Yemen crisis.

Iran’s foreign minister discussed Yemen with his Emirati counterpart by telephone on Wednesday.

The UAE largely reduced its military presence in Yemen in 2019 and has been engaging with Tehran under de-escalation efforts largely driven by economic priorities.

13 TERRORISTS KILLED, 7 SOLDIERS MARTYRED IN NAUSHKI, PANJGUR: ISPR

RAWALPINDI: 13 terrorists were killed, while seven soldiers embraced martyrdom as security forces repulsed terrorist attacks on their camps in Balochistan’s Naushki and Panjgur, the Inter-Services Public Relations (ISPR) said on Thursday.

The military’s media wing said the troops successfully repulsed terrorist attacks in Panjgur and Naushki areas last night, after which they carried out clearance operations to hunt down terrorists hiding there.

In the Naushki operation, security forces encountered and shot dead five more terrorists, bringing the tally of the killed terrorists to nine, it said, adding four brave soldiers, including an officer, embraced martyrdom while repulsing the attack.

A clearance operation is underway in the Panjgur area, the Inter-Services Public Relations (ISPR) said, adding four terrorists have so far been killed in Panjgur while at least 4 to 5 others have been surrounded by security forces.

During intense exchanges of fire, three soldiers embraced martyrdom and four soldiers got injured.

“As per the initial investigation, intelligence agencies have intercepted communications between terrorists and their handlers in Afghanistan and India,” the Inter-Services Public Relations (ISPR) said.