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A12 TECHNOLOGY
Friday 4 February 2022

Shares of Facebook parent Meta

plunge 23% on lower profits

Another problem: Recent
privacy changes by Apple
make it harder for com-
panies like Meta to track
people for advertising
purposes, which also puts
pressure on the company’s
revenue. For months now,
Meta has been warning
investors that its revenue
can’t continue to grow at
the breakneck pace they
are accustomed to.
“It is time for a reality check
on Meta’s position for the
metaverse,” said Raj Shah,
Facebook employees take a photo with the company’s new
name and logo outside its headquarters in Menlo Park, Calif., an analyst at the digital
on Oct. 28, 2021. consulting firm Publicis Sa-
Associated Press pient. “The metaverse is a
long way from being prof-
By BARBARA ORTUTAY verse would be a place itable or filling the gap in
AP Technology Writer where people can meet, ad revenue after Apple’s
Newly renamed Meta is in- work and play using virtual policy change.”
vesting heavily in its futur- reality headsets, augment- People’s changing on-
istic “metaverse” project, ed reality glasses, smart- line behavior is also limit-
but for now, relies on ad- phone apps or other de- ing Meta’s money-making
vertising revenue for nearly vices. abilities. More people are
all its income. But building it is not likely to watching video, such as
So when it posted sharply be cheap. Instagram’s Reels (a TikTok
higher costs but gave a Meta invested more than clone), and this makes less
weak revenue forecast $10 billion in its Reality Labs money than more estab-
late Wednesday, investors segment which includes its lished features.q
got spooked and knocked virtual reality headsets and
almost $200 billion off the augmented reality technol-
valuation of the company ogy in 2021, contributing to
formerly known as Face- the quarter’s profit decline.
book. It expanded its workforce
Meta’s shares fell 22.9% to by 23%, ending the year
$249.05 in after-hours trad- with 71,970 employees,
ing. If the drop holds until mostly in technical roles.
the market opens Thurs- The company also said rev-
day, the company’s overall enue in the current quarter
value, known as its market is likely to come in below
capitalization, is on track market expectations, due
to drop by a figure greater in part to growing compe-
than the size of the entire tition from TikTok and other
Greek economy, based on rival platforms vying for
data from the World Bank. people’s attention.
The metaverse is sort of Sheryl Sandberg, Meta’s
the internet brought to life, chief operating officer,
or at least rendered in 3D. said in a conference call
Meta CEO Mark Zucker- with analysts that global
berg has described it as supply chain issues, labor
a “virtual environment” in shortages and earlier-than-
which you can immerse usual holiday spending by
yourself instead of just star- advertisers put pressure on
ing at a screen. the company’s advertising
Theoretically, the meta- sales.