Meta reported revenue of $27.9 billion in Q1 2022. They will continue making billions from ads for decades even if the metaverse play goes nowhere. But if you believe that VR/AR is going to eventually go mainstream then Meta is positioned to be a player in that market, even if it’s just a 2nd or 3rd place player that’s potentially billions in additional revenue.
I don't think most people think it will crater and be gone tomorrow. I suspect people tend to think that if it is on a decline it will be a long slow death.
They make $200/year per user in North America, all 250 million of them. Cut that to 1/3 and their value as a company is far lower, but they still make more per user than a subscription service like Netflix. Now, you can say "nobody thought that ARPU was sustainable", but they have a long history of making unbelievable numbers bigger.
Their real mistake was not pushing to own the entire vertical stack, building unassailable moats like Google and Apple. Oculus is that bet, and other companies like Valve are pursuing similar strategies.
That's a pretty selective lookback. The big slide was 4 months ago. If you look at trailing 6 months, FB is down 40%, vs down 10% for S&P500 or 23% for NASDAQ.
You said "past few months" and so I quickly pulled up a 3 month history which is a dropdown option in the UI I was looking at. I replied with what I saw.
anyone who follows the stock market will not accuse me of being hyperbolic about FB’s stock plummeting in recent months, and yes 5 months is also “a few” lol…
10% is about what everyone in today's economy seems to be doing. it's the bigger slide from Apple blocking their tracking that should be more worrisome than a natural economic hiccup
The entire internet subsists on ads. Even Amazon retail, a store that sells physical goods makes its profit selling ads. If anything they're only going to become more important as to internet becomes more accessible to low resource individuals around the world.
I don't understand how people can make this statement and not immediately realize their is something deeply, deeply wrong about this situation.
Ads derive their value from the product being sold, the fact that ads themselves have become the economic underpinning of the entire internet, rather than actual things being sold, should tell you there is a problem.
Everybody realizes it's wrong. The issue is not a lack of understanding. The issue is the lack of an alternative.
People will not pay a penny for the vast majority of the internet, whether they be social networks or just plain websites. They won't donate either or do "micro transactions", not at the scale in which ads currently deliver revenue.
So for the vast majority of the internet, no ads = no money. And it ends right there, hobbyist bloggers aside.
I was recently taken aback by how much some of the online major destinations make per site load with ads. It is over $.04 USD. People visit hundreds of pages per day. What consumer will pay over $10 daily to access content that is free with ads?
Ads are here to stay. At best they may do less tracking in the future, but they remain.
Another unpopular thought...in a fully online, digitized society, how are companies supposed to advertise their existence or their products if there's no ads?
Not my problem, many would say. Well, it is your problem. Because you probably work at a company and they sell things.
Ads artificially increase the price of a product or service, because the cost of advertising is embedded in the price of what's sold; you're paying more money to be manipulated to buy something.
There are other externalized costs that aren't calculated, e.g. what's the cost to society on top of the "$10"/day?
What if ads also make us sicker, make poorer decisions, wasteful decisions - perhaps as simple as buying lower quality products because they have a higher profit margin and so it's the product you're exposed to, and then because we're sicker we spend more money on health?
There's not much conversation about all of this. I think the natural mechanisms of how information propagated via word of mouth before communications became what they are, how we are able to bypass those natural mechanisms, has some very negative impacts on society, e.g. buying products/services from people that didn't earn or deserve the attention, instead able to buy and manipulate you with cheap-shallow ads; what would the world look like today if this wasn't the case, what would your buying patterns be, what type of person would be amassing profits from the different buying patterns that would exist if there weren't ads, and what would the cascading consequences of that be?
> What consumer will pay over $10 daily to access content that is free with ads?
I have a similar question to "what customer will still load ads". And the answer is probably anyone still using Google Chrome after they upgrade the manifest version to v4 and finally kill adblocking.
