Facebook’s parent company Meta’s market value crashed on Thursday, falling over 25%.
This was the company’s worst trading session in history and a dramatic sign of a sea change across social media that has seen a massive amount of Facebook users leave the site.
The company has also been plagued with rising expenses due to its ambitious metaverse project. Facebook co-founder Mark Zuckerberg’s net worth fell nearly $30 billion in response to the shakeup, going from $100 billion to $85.9 billion.
“This isn’t simply a disappointing quarter but rather an existential moment for Meta,” said Vital Knowledge founder Adam Crisafulli to Forbes. “Investors will be forced to take a long and hard look at the company’s competitive position and consider whether it isn’t heading into a prolonged period of subpar performance — this will make it hard for the stock to quickly rebound.”
The quarterly earnings call found that Facebook has lost a million daily active users, which is a dramatic new low for the once dominant social media platform. Other Meta-owned sites like Instagram and WhatsApp have also stalled in their growth rates. The Meta labs were also down $10 billion from their Reality Labs division, the branch working on the VR and AR experiences marketed as being the future of the company.
Zuckerberg acknowledged that Meta and its group of social media platforms have been losing the fight against the uber-popular video-sharing app TikTok.
“People have a lot of choices for how they want to spend their time, and apps like TikTok are growing very quickly,” he said in a statement.
TikTok drawing users away from Facebook
TikTok, known in China as Douyin, hosts a variety of short-form user videos, from genres like pranks, stunts, tricks, jokes, dancing, and entertainment with durations from one second to three minutes.
TikTok beat Google to become the most popular website for 2021, according to IT security company, Cloudflare.
TikTok first earned the top spot for a day for the first time on February 17, 2021. It got a few more days in March and May as well. However, after August 10, 2021, the platform took the lead on most days.
Although Google did manage to take the lead for a few days, TikTok dominated important holidays like Thanksgiving which happened on November 25 and also on Black Friday, which was on November 26.
In September 2021, BBC reported that TikTok has surpassed YouTube’s average watch time per user in the United States and the United Kingdom.
Although YouTube still boasts more users and total videos watched than the Chinese app, the rising platform has surpassed YouTube in one crucial metric: U.S. users on the app spend more time watching more videos than U.S. YouTube users do on their site. In short, they get drawn in faster and stay for longer.