Facebook’s Historic Plunge And The Failing Bet of Metaverse!

Last week Social media giant, Facebook lost about $230 billion in value in a single day, in what was the biggest market drop for an U.S stock in history. Mark Zuckerberg, himself lost out on about $30 billion of his net worth, pushing him down on the global billionaire’s list. It seems like Facebook’s problems are running in an never ending loop. The recent rebranding of the company into “Meta”, or in general to the so called “Metaverse” has also not yielded much positivity in the company’s fortunes ufabet.

While the plunge might seem like an temporary market sentiment, it definitely raises concern over the future of the social media giant. After all the last 6 months have been awfully tough for the company. Lawsuits, allegations and controversies, Facebook has seen it all. Which brings us to the question of, Has Facebook already peaked its success, its limits? And would the Meta rebranding save the sinking ship?…..

The reason behind this historic dip
Last week on Thursday, Meta reported a decline in profits and daily users during the last quarter of 2021. And the grim part is that the forecast revenue for the current quarter isn’t that great either. The news spread like a wildfire across the market on Thursday, as Meta was left with about $230 billion wiped out from its market cap. Within a single day, the company lost its market capitalization of $898.5 billion to $661 billion. Facebook saw an average decline in its daily users for the first time in its entirety from 1.93 billion daily users in the last quarter to 1.929 billion users in the present quarter.

The company has been plummeting for some time now, thanks to internal reports that suggest the company’s practice of promoting polarizing contents that spread hate speech and misinformation among its users, for the sake of profits. The company has been bleeding money since its ascension as a Trillion dollar company, last summer. Experts have speculated, that the rapid rebranding of the company is a desperation move to drive-off the attention from the real internal issues inside the company.

Zuckerberg blames Tiktok and Apple for the company’s recent woes
Zuckerberg, CEO of Meta emphasized on the fact that stiff competition from rivals and new iOS policies are mainly the reasons behind the company’s recent decline in users and profits. Among all, he mentioned the viral short-video platform “Tiktok” as the company’s biggest competitor. Apart from the competition, the new iOS user policies by Apple is causing significant losses to Facebook. The company has estimated that Facebook might loose as much as $10 billion in 2022 due to the new Apple policy. Apple has recently launched App Tracking Transparency (ATT) functionality, which required apps to ask users for their permission before tracking them on apps and websites visited by them. The users on the other hand would have the liberty to simply deny such permissions, and get-on with their business.

The thing is that the entire business model of Facebook is based around advertisements and ad-revenue is its largest source of income. With the new iOS policy, companies like Meta would find it difficult to collect the huge resource of advertising data, it had access to earlier. Hence, it would become even more difficult to produce relevant ads to its users. Which in turn would hamper the ad-revenues of the social-media giant.