Saudi Press

Saudi Arabia and the world
Sunday, Jun 01, 2025

Facebook's Giant Crash Explained In 10 Points

Facebook's Giant Crash Explained In 10 Points

Facebook growth that had been on a seemingly perpetual upward trend slipped at the end of last year, with the number of people using the social network daily declining

Facebook's parent firm Meta on Thursday plunged over $200 billion in stock value - comparable to the size of New Zealand's economy - after results that raised doubts about the troubled social media giant's future. A few reasons why it happened:

Here's your 10-point cheatsheet to this big story:


1. Facebook growth that had been on a seemingly perpetual upward trend slipped at the end of last year, with the number of people using the social network daily declining. Meta executives warned of increased competition, particularly from video star TikTok as well as messaging services such as Telegram and Slack.

2. The firm is making a priority of investing in its Reels short-form video feature as well as apps such as WhatsApp and Instagram to stay in tune with users. That means spending big on services that are harder to make money from than the Facebook social network with its digital ad machine.

3. Meta executives told analysts that Facebook's ad-targeting efficiency is being undermined by a change Apple implemented to the software running iPhones. In the update of iOS, Apple required application publishers to ask permission before collecting data, much to the regret of companies like Meta that rely on it for ad targeting.

4. As iPhone users opt out of sharing data for targeting ads in Facebook apps, marketing messages become less precisely targeted and thus less profitable. "We believe the impact of iOS, overall, as a headwind on our business in 2022 is on the order of $10 billion," Meta chief financial officer David Wehner said on an earnings call. "So, that is a pretty significant headwind for our business."

5. Advertising at Meta also suffered with the broader market, as businesses curtailed budgets in the face of supply troubles, labour turnover, and pandemic woes. Meta is facing a "perfect storm" countering growth, according to Baird Equity Research analyst Colin Sebastian. "Our concerns about the near-term growth outlook for Meta were not only realized, but worse than we thought," Sebastian said in a note to investors.

6. Meta chief executive Mark Zuckerberg portrays the metaverse as the future of life on the internet. In that spirit, the tech company changed its name to "Meta." Making the immersive online world of the metaverse is expected to take many years and cost many billions.

7. A "Reality Labs" unit at Meta devoted to technology for intermixing actual and virtual worlds reported a loss of $10 billion last year, according to an earnings release. Major investors in the stock market are notoriously averse to waiting a long time for big returns, tending to trade shares based on potential for quick gains.

8. As Meta looks to make a "transformation" to better compete with the likes of TikTok, a hit with younger users, regulators in the US and elsewhere have vowed to curb its power.

9. A federal judge in January ruled that US regulators' re-worked anti-trust case against Facebook can go ahead, saying the complaint was more robust and detailed than the version denied in 2021.

10. The US Federal Trade Commission has alleged Meta holds an illegal monopoly by acquiring potential competitors that it now owns like Instagram and WhatsApp. The lawsuit, which could take years to go through the courts without a settlement, called for the "divestiture of assets," including WhatsApp and Instagram, to restore competition.

Newsletter

Related Articles

Saudi Press
0:00
0:00
Close
OPEC+ Agrees to Increase Oil Output for Third Consecutive Month
Turkey Detains Istanbul Officials Amid Anti-Corruption Crackdown
Meta and Anduril Collaborate on AI-Driven Military Augmented Reality Systems
EU Central Bank Pushes to Replace US Dollar with Euro as World’s Main Currency
European and Arab Ministers Convene in Madrid to Address Gaza Conflict
U.S. Health Secretary Ends Select COVID-19 Vaccine Recommendations
Trump Warns Putin Is 'Playing with Fire' Amid Escalating Ukraine Conflict
India and Pakistan Engage Trump-Linked Lobbyists to Influence U.S. Policy
U.S. Halts New Student Visa Interviews Amid Enhanced Security Measures
Trump Administration Cancels $100 Million in Federal Contracts with Harvard
SpaceX Starship Test Flight Ends in Failure, Mars Mission Timeline Uncertain
King Charles Affirms Canadian Sovereignty Amid U.S. Statehood Pressure
Iranian Revolutionary Guard Founder Warns Against Trusting Regime in Nuclear Talks
UAE Offers Free ChatGPT Plus Subscriptions to Citizens
Lebanon Initiates Plan to Disarm Palestinian Factions
Iran and U.S. Make Limited Progress in Nuclear Talks
The Daily Debate: The Fall of the Dollar — Strategic Reset or Economic Self-Destruction?
Trump Administration's Tariff Policies and Dollar Strategy Spark Global Economic Debate
OpenAI Acquires Jony Ive’s Startup for $6.5 Billion to Build a Revolutionary “Third Core Device”
Turkey Weighs Citizens in Public as Erdoğan Launches National Slimming Campaign
Saudi-Spanish Business Forum Commences in Riyadh
Saudi Arabia and Spain Sign MoU to Boost SME Sectors
UK Suspends Trade Talks with Israel Amid Gaza Offensive
Iran and U.S. Set for Fifth Round of Nuclear Talks Amid Rising Tensions
Russia Expands Military Presence Near Finland Amid Rising Tensions
Indian Scholar Arrested in Crackdown Over Pakistan Conflict Commentary
Israel Eases Gaza Blockade Amid Internal Dispute Over Military Strategy
President Biden’s announcement of advanced prostate cancer sparked public sympathy—but behind closed doors, Democrats are in panic
A Chinese company made solar tiles that look way nicer than regular panels!
Indian jet shootdown: the all-robot legion behind China’s PL-15E missiles
The Chinese Dragon: The True Winner in the India-Pakistan Clash
Australia's Venomous Creatures Contribute to Life-Saving Antivenom Programme
The Spanish Were Right: Long Working Hours Harm Brain Function
Did Former FBI Director Call for Violence Against Trump? Instagram Post Sparks Uproar
US and UAE Partner to Develop Massive AI Data Center Complex
Apple's $95 Million Siri Settlement: Eligible Users Have Until July 2 to File Claims
US and UAE Reach Preliminary Agreement on Nvidia AI Chip Imports
President Trump and Elon Musk Welcomed by Emir of Qatar Sheikh Tamim with Cybertruck Convoy
Strong Warning Issued: Do Not Use General Chatbots for Medical, Legal, or Educational Guidance
Saudi Arabia Emerges as Global Tech Magnet with U.S. Backing and Trump’s Visit
This was President's departure from Saudi Arabia. The Crown Prince personally escorted him back to the airport.
NVIDIA and Saudi Arabia Launch Strategic Partnership to Establish AI Centers
Trump Meets Syrian President Ahmad al-Shara in Historic Encounter
Trump takes a blow torch to the neocons and interventionists while speaking to the Saudis
US and Saudi Arabia Sign Landmark Agreements Across Multiple Sectors
Why Saudi Arabia Rolled Out a Purple Carpet for Donald Trump Instead of Red
Elon Musk Joins Trump Meeting in Saudi Arabia
Trump says it would be 'stupid' not to accept gift of Qatari plane
Quantum Computing Threatens Bitcoin Security
Michael Jordan to Serve as Analyst for NBA Games
×