META STOCK SOARS ON UPBEAT OUTLOOK
FACEBOOK and Instagram owner Meta on Wednesday reported its first annual sales drop since the company went public in 2012, but the fall was less brutal than expected, sending its share price soaring.
The social media giant said sales fell 1 per cent to $US116.6bn ($163.1bn) in 2022, while the number of users on Facebook hit two billion for the first time.
In a statement, chief executive and founder Mark Zuckerberg pointed to the success of improved algorithms on Meta’s video Reels service, which was delivering short clips more efficiently to users on Facebook and Instagram.
Meta competes fiercely with TikTok, the Chineseowned video-sharing platform that has proved a formidable rival in attracting young users away from oncedominant Instagram.
Mr Zuckerberg also lauded perfected artificial intelligence to better distribute ads after changes on the iPhone decided by Apple hampered Meta’s ability to target users.
The 2022 results ended a bad year for Meta, which in November announced it would lay off 11,000 employees, or 13 per cent of staff, in the largest worker reduction in the company’s history.
The company is also under pressure for making a huge gamble on the metaverse, the world of virtual reality that Meta believes will be the next frontier online.
However, the bet has yet to pay off, with Meta’s Reality Labs, the division that builds the necessary VR headsets and software, posting an operating loss of $US4.28bn in the last quarter of 2022. This followed big losses in the previous quarters.
Investors last year punished Meta, sending the company’s share price down by an astonishing two-thirds over 12 months, but the stock so far this year has so far recovered some of the ground that it lost in 2022.