Beneath Meta Platforms Inc.’s macroeconomic clouds is an existential crisis for the Facebook parent company that was on display when the technology giant delivered its latest results.
By the time Meta META posted earnings Wednesday afternoon, investors already had a sense for how the choppy macroeconomic environment was impacting advertising spending at social-media companies, and they knew from other reports in the industry that TikTok has become a greater competitor for advertising dollars.But Meta intersects with the TikTok threat in a more intimate way, as its platform is the most similar.
“So in the near term, the faster that Reels grows, the more revenue that actually displaces from higher monetizing surfaces,” Chief Executive Mark Zuckerberg said. “Now in theory, we could mitigate the short-term headwind by pushing less hard on growing Reels, but that would be worse for our products and business longer term since we’re confident that Reels will grow engagement overall and quality and will eventually monetize.
“Value seekers may be tempted with likely acceleration beyond Q3 but ex-macro, Reels must ramp monetization & stem Tiktok share loss, targeting must improve and investors must find religion on metaverse investments before the stock breaks out of its current valuation range,” he wrote, while reiterating an outperform rating but cutting his price target to $190 from $200.
Technology Technology Latest News, Technology Technology Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Source: verge - 🏆 94. / 67 Read more »