5 reasons why ‘Facebook’s hands are tied’
After Facebook‘s parent company Meta reported one of its most disappointing financial quarters in corporate history Wednesday, the founder of an app that Mark Zuckerberg’s company had acquired shared some thoughts on its current problems.
Nikita Bier launched an app called tbh in 2017 that allows users to anonymously pay their friends compliments. Facebook bought it for an undisclosed sum that same year.
And while Bier, who no longer works at Facebook, said “Zuck is the greatest operator in the world and I wouldn’t bet against him in the long term,” he did have some thoughts on why the company is stumped at the moment.
‘High ARPU coastal users have churned; TikTok is eating their lunch’
Bier did not immediately respond to Insider’s request for an interview, but he’s likely referring to the fact that Meta’s user numbers shrunk for the first time in its history, per its Q4 earnings reported Thursday.
Facebook and others have been clamoring to keep up with the wildly popular TikTok app, which has no problem raking in young users.
‘They can’t acquire because of antitrust scrutiny”
Meta has fielded brutal criticism from lawmakers and activists in recent years over what critics say is its abuse of market dominance. Its peers, like Google and Apple, have been thrown in the ring as well, but Meta specifically has been everyone’s punching bag and its reputation has taken a hit.
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Meta’s most scrutinized acquisitions are Instagram and WhatsApp, which it bought in 2012 and 2014, respectively. Documents surfaced as part of legal proceedings show that Zuckerberg wrote in 2008 that “it is better to buy than compete.”
Meta has faced a bevy of federal antitrust lawsuits, attorneys’ general investigations, and more within the past couple of years.
‘They can’t build because founders don’t want to be there’
Insider’s Kali Hays reported that recruiters were struggling to hire tech talent for Meta, citing concerns of employees receiving a “black mark” on their career by working there. Protocol reported in October that Meta was seeing decreasing rates of acceptance on job offers.
The so-called Facebook Papers emerged last year, detailing evidence that the company knew of its own wrongdoing like the harm it poses to young users but undermined efforts to correct it. The documents heavily impacted Meta’s public image, even while the company pushed back against many of their takeaways.
‘IDFA killed their ability to target ads’
Apple added a feature to iPhones last year that severely impacted Meta’s ability to target users with ads, a crucial part of its lucrative advertising business.
No longer able to rely on Identifiers for Advertisers (IDFA,) Meta will likely lose $10 billion in 2022, CFO David Wehner said on the company’s Wednesday’s earnings call.
‘The metaverse is 10yrs out’
Meta shoved the term “metaverse” into the limelight last year when it announced it was changing its name (the company stood up a new parent firm called Meta, under which Facebook, Instagram, and other products are now housed.)
Now, the rest of the corporate world has latched onto the concept, turning it into a hot buzzword. But the metaverse the next “inevitable” generation of the internet that will allow us to also interact spatially isn’t here yet.
And it likely won’t be for a while experts previously told Insider that the AR and VR technology needed for mass adoption is 10 years off.
Meaning in the meantime, Meta remains saddled with reputational damage, antitrust scrutiny, and other woes.
The summary aside, Bier did note that there could be consequences of Meta’s demise, such as innovation slumps in the social media world.
