Arab Press

بالشعب و للشعب
Friday, Aug 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

Arab Press
0:00
0:00
Close
IMF Upgrades Global Growth Forecast as Weaker Dollar Supports Outlook
Politics is a good business: Barack Obama’s Reported Net Worth Growth, 1990–2025
UN's Top Court Declares Environmental Protection a Legal Obligation Under International Law
"Crazy Thing": OpenAI's Sam Altman Warns Of AI Voice Fraud Crisis In Banking
Japanese Prime Minister Vows to Stay After Coalition Loses Upper House Majority
President Trump Diagnosed with Chronic Venous Insufficiency After Leg Swelling
Man Dies After Being Pulled Into MRI Machine Due to Metal Chain in New York Clinic
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
Iranian President Reportedly Injured During Israeli Strike on Secret Facility
Kurdistan Workers Party Takes Symbolic Step Towards Peace in Northern Iraq
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
AI Raises Alarms Over Long-Term Job Security
Russia Formally Recognizes Taliban Government in Afghanistan
Saudi Arabia Maintains Ties with Iran Despite Israel Conflict
Mediators Edge Closer to Israel-Hamas Ceasefire Agreement
Germany Seeks Taliban Deal to Deport Afghan Migrants
Emirates Airline Expands Market Share with New $20 Million Campaign
Robots Compete in Football Tournament in China Amid Injuries
China Unveils Miniature Insect-Like Surveillance Drone
Marc Marquez Claims Victory at Dutch Grand Prix Amidst Family Misfortune
Iran Executes Alleged Israeli Spies and Arrests Hundreds Amid Post-War Crackdown
Trump Asserts Readiness for Further Strikes on Iran Amid Nuclear Tensions
Qatar Airways Clears Backlog of Passengers Following Missile Threats
Iran's Parliament Votes to Suspend Cooperation with Nuclear Watchdog
Trump Announces Upcoming US-Iran Meeting Amid Controversial Airstrikes
Trump Moves to Reshape Middle East Following Israel-Iran Conflict
NATO Leaders Endorse Plan for Increased Defence Spending
U.S. Crude Oil Prices Drop Below $65 Amid Market Volatility
“You Have 12 Hours to Flee”: Israeli Threat Campaign Targets Surviving Iranian Officials
Oman Set to Introduce Personal Income Tax, First in Gulf
Germany and Italy Under Pressure to Repatriate $245bn of Gold from US Vaults
Trump Praises Iran’s ‘Very Weak’ Response After U.S. Strikes and Presses Israel to Pursue Peace
WATCH: Israeli forces show the aftermath of a massive airstrike at Iran's Isfahan nuclear site
We have new information and breaking details to share about what is shaping up to be a historic air campaign tonight
Six Massive Bombs Dropped on Fordow; Trump: 'A Historic Moment for the U.S., Israel, and the World'
Fordow: Deeply Buried Iranian Enrichment Site in U.S.–Israel Crosshairs
United States Conducts Precision Strikes on Iran’s Nuclear Sites
US strikes Iran nuclear sites, Trump says
Pakistan to nominate Trump for Nobel Peace Prize.
Israel Confirms Assassination of Quds Force Commander in Tehran
16 Billion Login Credentials Leaked in Unprecedented Cybersecurity Breach
Senate hearing on who was 'really running' Biden White House kicks off
G7 Leaders Fail to Reach Consensus on Key Global Issues
Mass exodus in Tehran as millions try to flee following Trump’s evacuation order
Iranian Military Officers Reportedly Seek Contact with Reza Pahlavi, Signal Intent to Defect
China's Iranian Oil Imports Face Disruption Amid Escalating Middle East Tensions
Trump Demands Iran's Unconditional Surrender Amid Escalating Conflict
Israeli Airstrike Targets Iranian State TV in Central Tehran
President Trump is leaving the G7 summit early and has ordered the National Security Council to the Situation Room
×