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NEW YORK, Oct. 27 (AP) Facebook parent Meta reported Wednesday that its revenue fell for a second straight quarter as competition from popular video app TikTok led to a drop in ad revenue.
The weak results this quarter raised new questions about whether Meta’s plan to spend $10 billion a year on the Metaverse — a concept that doesn’t quite exist and may never exist — is prudent.
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Meta’s results were disappointing after weak earnings from Google parent Alphabet Inc. and Microsoft this week.
The Menlo Park, Calif.-based company earned $4.4 billion, or $1.64 a share, in the three-month period ended Sept. 30.
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That’s down 52% from $9.19 billion, or $3.22 per share, in the year-ago quarter.
Analysts on average expected earnings of $1.90 per share, according to FactSet.
Revenue fell 4% to $27.71 billion from $29.01 billion, slightly ahead of analysts’ forecast of $27.4 billion.
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 its focus on the metaverse, a concept of virtual, mixed and augmented reality that few people understand, is confusing people — and it’s working on it Coping with an increasingly 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. (Associated Press)
(This is an unedited and auto-generated story from the Syndicated News feed, the body of the content may not have been modified or edited by LatestLY staff)
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