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Facebook’s parent company Meta reported its revenue fell for a second straight quarter as advertising revenue fell as it competed with popular video app TikTok.
The weak results this quarter have raised new questions about whether Meta’s plan to spend $10bn (£8.6bn) a year on the Metaverse – a concept that doesn’t yet exist and may never be – is prudent.
Meta’s results were disappointing after weak earnings from Google parent Alphabet and Microsoft this week.
Meta earned $4.4 billion (£3.78 billion) or $1.64 per share in the three-month period ended September 30.
That’s down 52% from $9.19 billion (£7.9 billion) or $3.22 per share a year earlier.
Revenue fell 4% to $27.71 billion (£23.83 billion) from $29.01 billion (£24.95 billion).
Analysts expected earnings of $1.90 per share on revenue of $27.4 billion (£23.57 billion) in the most recent quarter, according to FactSet.
Shares of Meta plunged 14% in after-hours trading.
Some of the company’s investors are concerned that Meta is spending too much money, and that its focus on virtual worlds, a concept few understand about virtual, mixed and augmented reality, is confusing people — while it grapples with growing Weak advertising business.
Brad Gerstner, CEO of Meta shareholder Altimeter Capital, wrote in a letter to Meta CEO Mark Zuckerberg earlier this week: “Meta has fallen into A situation of excess — too many people, too many ideas, too little urgency.”
“This lack of focus and fitness can be masked when growth is easy, but it can be fatal when growth slows and technology changes.”
Meta also forecast weaker-than-expected revenue for the quarter, further fueling concerns that the revenue decline is more of a trend than an anomaly.
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