Do you hear that? It’s the sound of every Meta manager breathing a deep sigh of relief, because unlike last quarter, Facebook’s daily active users (DAUs) are… quite a bit.
Meta reported its quarterly revenue for the second time since Facebook’s rebranding. Last time, the Facebook platform reported its first drop in DAUs in its 18-year history, but now Facebook has 1.96 billion DAUs, up from 1.92 billion last quarter.
Of course, Meta’s family of apps — Facebook, Instagram, WhatsApp, Messenger — isn’t the star of the show. As CEO Mark Zuckerberg explained, the revenue from these apps helps fund Meta’s virtual reality projects, which he expects to become the company’s crown jewel in the future.
Was it worth renaming the company? In the first quarter alone, Meta’s Reality Labs was operating at a loss of $2.96 billion, and Reality Labs lost more than $10 billion last year.
“It’s only when these products really hit the market and grow significantly, and that market eventually becomes big, that it will make a big contribution to revenue or profit for the company,” Zuckerberg said. “It lays the groundwork for what I expect to be a very exciting 2030.”
Horizon Worlds, Meta’s VR social app, started rolling out monetization features for creators late in the quarter, but those in-app purchases won’t change much if the platform doesn’t appeal to many more people. Soon, Meta will be rolling out a web-based version of Horizon Worlds, welcoming people who don’t have $300 to drop on a VR headset. Zuckerberg said Horizon is the “center” of the company’s strategy to grow the metaverse.
“I recognize that it is expensive to build this. It’s something that’s never been built before,” Zuckerberg says. He admitted that as a result of these investments, Meta’s overall profitability will not increase in 2022, mainly because ad revenue has not grown as fast as expected.
Like competitors, Snapchat and YoutubeMeta also cited a declining trend in ad revenue as a result of Russia’s war against Ukraine (Facebook is now banned in Russia). Overall, Meta’s quarterly revenue was up 7%, missing analyst expectations of 7.8%. The combination of higher DAUs and lower-than-expected ad revenue can be explained by the fact that Meta’s applications are growing in regions such as Asia-Pacific, where ads are cheaper, rather than in the United States and Europe.
Reality Labs Meta’s most promising money maker are the headsets themselves. The Meta Quest 2 had a major sales boost over the holiday season, and the company is already planning to release its new headset dubbed “Project Cambria” later this year.
Zuckerberg said the new premium headset “will be focused on business use cases and potentially replace your laptop or work setup”. Meta also builds eye tracking and face tracking so that when you socialize in VR, people can perceive your real facial expressions. He added that we can expect more news about the headset in the coming months.
Back on its family of apps, Meta is facing competition from TikTok as it aims to overtake the platform as the leader in short videos. But Zuckerberg reported that his company’s investment in its TikTok Reels clone is working, noting that Reels accounts for 20% of the time users spend on Instagram. In addition, video accounts for 50% of the time users spend on Facebook.
†I’m only to attempt for to carry out the the community in a way or have been positioning ourselves if the first the community for building the future by social Interaction and the metavers,” said Zuckerberg. “If you care about these things, l to think have been acquire the better people for just work here.”