Social media giant Facebook has seen its daily active users (DAUs) drop for the first time in its 18-year history. Facebook’s parent company Meta Networks disclosed that DAUs dropped to 1.929bn in the three months to the end of December, compared to 1.930bn in the previous quarter. The loss was greatest in Africa and Latin America, suggesting that the company’s product is saturated globally-and that its long quest to add as many users as possible has peaked.
The massive stock drop, which instantly wiped out roughly $200 billion in market value, reveals that Facebook’s corporate rebrand to Meta is not enough to distract investors from the challenges in its core business of social media. Not only was user growth across Facebook, Instagram, and WhatsApp essentially flat last quarter, but the main Facebook app lost 1 million daily users in North America, where it makes the most money through advertising. That fall led to an overall decrease in daily users of Facebook globally.
Meta is still enthusiastically profitable, it made nearly $40 billion in profit last year alone, mostly from advertising. But it’s also losing billions on Reality Labs, the division responsible for the Quest VR headset, VR software, forthcoming AR glasses, and other metaverse-related initiatives. That division lost $10.2 billion last year and reported revenue of $2.3 billion, a statistic that includes sales of the Quest and its cut of VR app purchases. Meta still declined to disclosed the number of sales for Quest, though third-party estimates peg the number somewhere around 10 million units. On an earnings call with investors Wednesday, Mark Zuckerberg said Meta’s next VR headset will be released later this year and be at the “high end of the price spectrum.”
Facebook’s user growth has delayed in the U.S. and Europe for the last several years, though the company previously made up for it by consistently adding users all over the world. These new numbers, which show a decline in daily active users on the Facebook app, suggest that Facebook is becoming flooded worldwide as well, a potentially worrisome trend and one that demonstrates another reason the company is pushing so forcefully into new areas such as hardware.
The current development regrettably could drop Facebook’s ranking among the most valuable companies in the world.
